And while part of my hesitation had to do with my optimism about iCombat’s potential and my marketing ability, it also had to do with the fact that I rarely buy full versions of games (although I do occasionally). After just launching my lite version yesterday I can say that my concerns about the lite version were misplaced and might have cost me quite a bit in lost income. Below are my main takeaways from having waited on launching the lite version and why I think too many indie iPhone developers wrongly steer clear of lite versions:

1. Know your Apps Core value and its core user: This sounds douchey but it really is harder than it sounds to have the discipline to know the profile of your core user and then choose that feature you think will resonate most.  For example, if you are making a game it is easy to think kids and adults will like it and they will all get hooked on the game play AND the graphics AND the story equally.  Odds are your app will not resonate with everyone, and one salient feature will be the hook so the sooner you figure it out and admit it to yourself the better. You may be wrong, but better to know your target than water down your strategy by pursuing too many angles.  Needless to say once you have your app’s core value outlined it will also be that much easier to design your lite version.
2. The App store is not a lemonade stand: The App store is one of the largest, most seamless content delivery platforms ever and when it comes to pricing most of us fail to understand just how fundamentally different this is from anything we have ever seen.  As a result we apply our personal conceptions of scarcity, value or what it means to transact with someone to something that is totally different.  If you have released an app you will agree that pricing decisions or the debate about a lite version are often more emotional than rational.  I am sure more than one developer has though “I don’t want to give it to someone for free when I worked 3 months on it every night after work while my wife was screaming at me because I was never around.”  That would be okay to think if you toiled on a model airplane or a painting for that period and were selling the one unit you had created, but in the App store you can divide that effort across 40MM+ people so who really cares if 5MM users get your app for free if in the end 250k of them buy it?
3. Be careful about buying into the media hype: I am not going to preach like everyone else about how little is being made on average. I don’t care about that because no one gets into App development to be average – if we didn’t all think we were working on the next Enigmo we probably wouldn’t be doing it.   I am talking more about the marketing angle.  Don’t fool yourself about how hard it is to get noticed, especially as the bigger game makers start to move to the iPhone platform.   It is getting more and more difficult to get blog coverage  so if you don’t have either a major platform to launch from or an existing fan base to leverage, your main form of exposure will be the lite version.
4. The blogosphere is like steroids (but it won’t make you #1): Many developers see Gizmodo or Techcrunch as the definitive tipping point, and it could be for an app but if your app does not deliver the viral hook no blog will save it.  As far as I can tell there haven’t been any cases of a blog breaking an app that then jumped to #1 and stayed there for a long amount of time (please correct me if wrong).  Blogs are like steroids, can help you get from 10th to 1st or from 500th to 400th, but not from 10,000th to 1st.
5. Don’t hide from App store criticism & negative ratings. Tying back to the second point, it is hard to take criticism for something you have worked hard on and so there is a natural hesitation to launching a lite app as users can be much more harsh reviewers. Again the goal is to get die hard fans to buy a copy, so it is OK if tons of people don’t like your game or review it poorly because all you need is some that really love it to spread the word. Maybe not launching a lite version allows for more control over the reviews (as there seems to be a natural bias of paying users to give better reviews) but this helps no one. This only reduces the total amount of people discovering your app and limits your earning potential.

Bottom line developers need to stop pricing their apps and deciding strategy based on vague feelings of what is value or what is deserved.  With frictionless transaction costs and so many users, your worst enemy for getting noticed may just be yourself.  So we should all stop thinking about how our 3 months of work is selling for less than a cup of coffee (or could be given away for free) and start focusing on increasing the amount of people using our apps.

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WTF man. Nobody does this. Ever. And the damn point of Installous is to let you try before you buy. And you just f—– up the whole system. So f— you dude, I would have bought it after trying it out, IF it was any good. I think it probably sucks so you don’t want people to test it out first…Nice job man. Way to suck at life. And I hope that nobody will buy from you just because of this.

I was in customer service mode when I saw this post so I quickly fired off one of the most unnecessarily nice e-mails of my life:

Hey dude,
Thanks for the post.  I disagree with you that most people use Installous to try before they buy.  So you know, I spent the last 3 months on this project and currently over 60% [of users] are not paying.

I get your point…and what I was trying to do here was convert the type of people you are not talking about (those that pirate everything with no intent to buy) as opposed to letting it just go unchecked.

I would like you to try the game though…would you download it if I sent you a promo code?  Let me know.
Thanks.

Now me sending this e-mail was crazy I know but from my point of view iCombat had just launched and I didn’t want to have anyone be negative on my app.  What followed my e-mail was surprising, the pirate responded in a very conciliatory tone, apologizing and so I sent him the promo code.  His response several days later was enthusiastic, saying “I love the app dude, it’s awesome.”  And this is where the craziness begins, he then proceeded to make a YouTube clip of the game and he even offered to host a contest and do a more serious quality demo. I even found a comment of his on YouTube where he actually attacked a pirate who linked through to a piracy site.  This pirate had gone from cursing me out to cursing out other pirates, defending my interests and helping get the word out about Combat.

Now maybe this pirate was emotionally unstable or just a kid, but either way I learned quite a bit from the experience.  Key lessons below:

1. There are a lot of fanatical people on the web

• If you have dealt with customers on the web you can attest to this fact. There are a decent amount of people that seem to have nothing better to do than criticize or evangelize your product.  Needless to say this can be both good and bad.

2. On the web, everyone is your customer

• Since anyone, even people who aren’t paying customers (or even customers for that matter) can share their opinion about your product, you have to treat everyone as if they are a customer.  It’s kind of like when you walk in to a nice hotel and get treated like a guest even when you aren’t one.  Not only can these hotels not afford to be wrong, but they benefit anytime someone experiences their brand.

3. You never know which of your users (legal or illegal) has the largest digital footprint

• On the web, having influence is largely a result of putting in the time. As a result having influence usually results from a user being passionate and being willing to put in the time (Scoble or Kawasaki sending out Twitter updates on a Saturday night comes to mind) but this energy can also stem from a user being just being crazy or immature
• So while tapping users as evangelists of your product is extremely effective, the flip side is that you have to go extra far to keep your users happy so they don’t go rogue and try to sink your brand across the web

4. On the web, user opinion is the ONLY thing

• Unlike a brick and mortar business for example, web businesses have no geographic advantages like default foot traffic (unless you have a web domain that is self explanatory like pets.com or is a typo of Google)
• The digital herd is influenced primarily by word of mouth and the experience you leave customers with so loyalty is everything

I know in my example above my e-mail was a bit like asking someone robbing my store if they were finding everything they needed.  On the surface it sounds ridiculous but if you are just getting started you need everyone to speak highly of your product.  Was giving him a promo code crazy?  This pirate took the time to comment on my website (literally 1 out of every 300 that visited did) so he was clearly the type of internet user who is willing to spend the time posting to sites.  Developers give promo codes to fans and bloggers for reviews so is letting an active pirate spread awareness any different? Anyone who loves your app will talk about it to friends, be seen using the app in public and potentially be an influencer online.

The key take away is that every user counts, so even if you don’t genuinely care about your users (hopefully you do) the next time you get a question or e-mail from a tedious customer just remember that the power lies with you whether that person chooses to help or hurt your brand.

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The rise of the fractured, multichannel market has created dozens of sites that developers now need to visit to build goodwill and help gain exposure, something that is fundamentally different from what they probably want to be doing. In my case this translates into 18-20 hours a day since launch to manage the marketing effort and frankly it is still more than I can handle. While I have enlisted friends and an intern to help, most developers don’t have the luxury of dedicating all of their own time to managing their launch.

I have compiled a list of some of the tools and sites I think necessary to use today:

Top Down channels – kissing the ring

1. Bloggers – what some refer to as the “digital influencers” – sites with major traffic like Gizmodo, Techcrunch, GigaOM
2. Targeted review sites – Touch Arcade, 148Apps, Pocket Gamer, etc. – I have counted 60+ serious ones in all

Bottom Up channels – connecting with your users

1. Facebook – both personal status and group page
2. Twitter
3. MySpace
4. App/ Development/ Gaming Forums - Touch Arcade, maybe iPhonedevSDK, etc.
5. Product website & blog – here you need to have a demo, maybe a news section and your blog
6. YouTube – a great way to communicate with avid gamers
7. iTunes App store summary

Analytics Tools – monitoring usage, downloads, buzz

1. User downloads – iTunes Connect – Heartbeat App or AppViz (super easy to use but less flexible than Heartbeat)
2. Usage behavior – Pinch Media – gives you uniques, geo data, version & device stats, as well as unique data by action in your App (very cool)
3. App ranking – AppRanking by Michael Dorn or Mobclix
4. Web traffic - Google Analytics or Wordpress Stats
5. Affiliate data – Linkshare – here if you are an Apple affiliate you can earn back 5% of your 30% cut that goes to Apple – and monitor clickthrough conversion data from your site
6. Brand management – ScoutLabs or Google Alerts – Scout doesn’t really seem to work for small apps or early on in a campaign as it is, for these smaller apps Google Alerts is a great basic filter

While this list is not comprehensive this is basically everything I am using for the marketing of iCombat. I didn’t realize just how many channels and tools this involved until trying to post an urgent piece of news.  When iCombat was reviewed in Gizmodo’s weekly roundup of iPhone apps I quickly wanted to update every channel I was using.

Spreading the word for that first update went something like this: first update Twitter, then my Facebook status, then the Facebook “Fans of iCombat” group news section, then the iCombat website news page, then the Touch Arcade forum thread discussing iCombat, then I finally shot some e-mails to friends (funny I actually just realized in writing this that I forgot to update my App description in iTunes for the good review – add that to the list).

Once I had finished with the news updates, 2 hours later, I started to comb the anaytics tools: first Pinch media, then user reviews in iTunes, then Mobclix to see if rankings had hit, then Wordpress stats to see website hits, then Linkshare to see the conversion rates, then Scout Labs to check for buzz.

What I experienced was the effects of the new multichannel model where the developer has had to become a social media explorer, pushing into every nook and cranny of the social web.  From gamer forums to niche blogs by 12 year old app reviewers (they do exist), developers risk ignoring these communities at their own expense.  With users fatigued by so much new product noise, it is easy for an unmonitored launch to go unnoticed by these users.

Not all products are good enough to sell themselves, and even if they are amazing, the system isn’t efficient yet at rewarding quality (more on this later).  So while I concede part of the problem is that most developers don’t have the time, especially amateur ones, to dedicate to marketing, I do think we all still need to shift our attention to just how important app marketing is.  Traditionally, developers seem to look at rising to the top in the App store as primarily a question of the product.  I would argue that in most cases it is equal parts product and packaging (dare I say it may be even more about packaging).  This new balance should be weighed when estimating the time, cost and energy it will take to execute your idea – i.e. when laying out a development time line, product features and depth of marketing focus should be weighed as equally relevant factors (as each is a drain on your resources, be it time, money or energy).

I don’t know the reason developers ignore marketing as much as they do.  While it is undeniably a question of bandwidth, it must also have to do with the underlying personality traits of developers as a group.  The desire to code, to focus on the hard part leads to a natural urge to ignore the boring marketing and a disdain for the whoring out that is pushing a product.  In the case of iCombat, we too struggled to stay engaged once we launched the app, but had to remember that we were only half the way there.  In our case, I was planning and handling marketing all along, so like a relay, my work began as the coding ended.

As a lone developer, the combination of fatigue at the end of a project and the lack of desire to get into “marketing” mode is what leads to developers choosing to focus on the wrong thing.  Here is where most developers launch, email their friends and family and a few review blogs, and then return to working on updates for their app.  This decision to immediately turn back to updating is precisely where most developers doom their apps (I am not talking about gimmicky apps or super early launch and iterate strategies like Pocket God).  In my mind this is just like carrying a child around for nine months, giving birth and then deciding to not feed the baby.

The reason that post partum neglect is such a travesty (I will leave that horrible metaphor alone from here out I promise) is that the App store is the PERFECT place to get into marketing mode.  Content discovery is inefficient and the market is young so you can make an impact and experiment without knowing the landscape.  It’s like Junior Prom, in the App store; it’s basically everybody’s first time.

To understand the opportunity it helps to look to the music industry where content discovery dynamics are similar.  Here, the highly subjective nature of determining “quality” and the huge breadth of options makes ranking what is good difficult.  And it is precisely in this type of inefficient discovery marketplace – where success is not necessarily deserved that a system of patronage becomes key.  Since the music industry is a highly evolved market (although getting rocked by technology shifts), an elaborate web of connections has developed where bribes, quid pro quos, image consulting, content engineering and the like, all thrive.  The app market will eventually trend toward this, as do all markets, where market leaders seek to protect and enhance their competitive advantage, but for now it is still young.

In the App store the definition of what is “good” is all over the place, open to interpretation across the huge breadth of gaming, niche, utility, gimmicky and entertainment apps as well as age and demographic groups – so the opportunity to define what is good is wide open for anyone willing to get down into the dirt and push.  While it is fantastic that there is no system of patronage or well laid tracks in the app store in terms of rankings and exposure (as occurs in music), it is a bit like the Wild West in that everyone is in a land grab racing for market position (whether it be in App reviews, app analytics, brand management, or the apps themselves).  What’s clear is that the ones who will triumph aren’t those sitting waiting for the meritocracy to kick in, but rather those who act aggressively and start thinking creatively about how they can get noticed.

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Enter developer Owen Goss, creator of Dapple, who posted a self described “brutally honest” description several weeks ago about how he had done in his first month of sales. While Owen just came out with a lite version of his app and his experience is far from over, the numbers he provides highlight just how disheartening the launch period can be.  To sum it all up, in the first 24 days of Dapple being available it sold 131 copies worldwide.  That wouldn’t be such a bad deal if it were a side project, but Owen spent 6 months and over 30k developing the game (we should back out that he paid himself a salary throughout though).

While the reviews of Dapple have been strong and it clearly is a quality product, the game had a few key factors going against it.  First of all it entered a competitive game genre and had a $4.99 price point which couldn’t have helped much early on.  I won’t get into the full discussion around the pros and cons of Owen’s marketing strategy but check out the full story here if you are interested (also check out Owen’s awesome slides on his experience with Dapple here – pdf).  I am more interested in how he is dealing with the early setbacks.

Surely publishing sales data got Dapple noticed, evidenced by the fact that I am writing about Dapple now, but is this really going to help? And just how long do we tinker with our formulas until you know it is time to give up and try another app?  Is it until the lite version fails to boost paid downloads, or until or the price is dropped to $0.99, or maybe just until all of the major sites refuse to review the app?  As I get within a few days of submitting iCombat (that’s right, bugfixing is almost over!) I am trying to be optimistic but also prepared for a long hard slog of self promotion, begging, and screaming to get my app noticed.  We’ll see if I can avoid having to post a “brutally honest” entry of my own once my app launches…

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With the iPhone and iPod touch, Apple is winning in two formerly very different spaces: The smart phones market… really, the mobile phones market: Apple is already one of the largest phone makers in the world (#3 in revenues after only Nokia and Samsung), and hands-down the leader in smart phones and next-gen devices

The handheld gaming devices market. Who’d’ve thunk in July of 2007 that Apple would be rivaling Nintendo and Sony for leadership in the handheld games devices market? Well, six months into the App Store, there are three times more games available on the App Store than for the Nintendo DS, five times more than for Sony PlayStation Portable – and, says BusinessWeek , Apple is on track to sell as many game-capable handsets in twelve months as Nintendo, the current market leader, has sold in its most recently reported 18 months.

At Tapulous, we’re still getting used to that idea, and trying to shake our habits of assuming that all our users are above the legal drinking age, on an iPhone, and always online.”

Bart offers a much needed dose of enthusiasm and reminds his readers that last year, over 100 million app downloads were done in 90 days.  The numbers are astonishing, and while many of these downloads are free applications, the amazing fact is that developers have access to well over 13 million devices by now (was around 12+ million by Q4 ‘08 see here) for almost no upfront or fixed costs at all.  And now with Apple’s new focus on marketing the App store more aggressively (just check out your local Apple store or turn on the TV) you get free marketing as well.  Perhaps for me the best part about accessing users though the iPhone is the near frictionless 1-click purchase solution that removes all of the trouble associated with purchasing something online.  By lowering this friction, Apple has effectively made the dollar cost of most apps the new free (Europe has known this with SMS campaigns for over 5 years).  This is well worth the 30% cut that Apple takes and in return they get to offer mobile users the most impressive deep resource in mobile computing.  So I say ignore the 25,000 apps (as of 03.05.09) and negative usage stats and focus on creating a quality app for the 13mm+ users waiting for you.

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1. “Crapware” – cheap to make in terms of time and resources.  Targeted by both experienced and inexperienced developers.  Business model is either ad supported or sell for $0.99.
2. Full fledged apps by amateur developers – more elaborate design and execution by part time developers.  Attempting to create a full game experience with iShoot and Trism being good examples.  Business model is pay model with prices between the $1 and $5 range.
3. Full apps by funded start-ups – professional developers focused on higher quality games.  Here we have iBowl by the Social Gaming Network for example.  Quality of applications is high, business model is anything under the sun (to see one of the more creative examples check out Toy Bot’s $10k giveaway marketing strategy)
4. Professionally produced games – major studios like Sega or EA using teams of developers to leverage the iPhone platform.  Business model is selling games for $5+, probably closer to $10.  A good example is Spore.
5. Specialty “niche” apps – made by professional iPhone development companies for specialized purposes.  Usually sell for $10+ or have a lite version that functions as an extension of existing brand.

I know from personal experience that by the time I am paying $5 I expect something pretty damn good.  And not because it is a lot of money but because there are THOUSANDS of apps that cost much less, if anything at all that I could have chosen instead.  Barry Schwartz calls this the paradox of choice, and describes how our consumptive experiences can be poisoned by our awareness of the fact that so many other options exist.  Maybe this is why there are so many angry reviews of the more expensive apps; not only are users spoiled by the free apps in the store but they are pissed off when they make what they perceive to be the wrong choice.  So where does this leave us?

While I understand the current strategy of using price as the sole tool to spur demand, the ideal solution would be to create a more efficient discovery process for the user where they can try before they buy – thus allowing a larger purchase to be less of a gamble.  For now I plan to focus on the middle pricing range, making sure to deliver good value to my users while resisting the temptation to fall to the lowest pricing point to spur demand.

iPhone Usage Patterns by Pinch Media

Techcrunch is out with a new post today addressing the pricing dilemma, where they offer Pinch Media’s data on application usage over time as evidence that free apps are not the way to go.  According to Erick Schonfeld “for all but the most successful apps, the free route does not make much sense because there is not enough time to recoup the costs of developing the app from advertising.”  This is because the data suggests that only 20% of users return the SECOND day after downloading and only 5% of users return by day 30.  So it is easy to see why even with high online CPM rates you would still not have much time to recoup your investment.  Of course if you can create the application in an hour then maybe it still makes sense but current trends suggest that the market for simple apps is also getting more competitive.  If there are 20 free versions of a level in the app store then odds are it is not going to be that easy to rise above the noise.  See some great slides from Pinch Media’s CEO Greg Yardley below:

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The question “crapware” apps raise for the app store are obvious, why would developers and businesses spend weeks and months and maybe tens of thousands of dollars to build an application that is competing with one trick apps that sell for free?  Surely pricing pressure and excess supply will send the entire app store to the ad supported or near free pricing points.  Well I disagree and am not too concerned that this will happen.  There may be 75 versions of flatulence apps and I already found about 10 copying Sound Grenade but I don’t think that this will last for very long.

The main reason I don’t think “crapware” will make too much sense going forward is that these apps are just too easy to replicate and will eventually become commoditized.  Let’s say you are the first to create a lighter effect on the iPhone and you are lucky enough to hit the viral level, odds are your revenue will be cannibalized by copycats (for a hilarious example of what can happen see iFart versus Pull My Finger lawsuit documents here).  And because the application market is still young and inefficient there is plenty of room for “crapware.”  I know there will always be gimmicky apps and maybe even an equivalent to user generated content on the app store but I don’t think it will become the rule.  These simple apps will form the long tail of sales and will pose little threat to the more elaborate apps in the App store once there is enough quality app inventory.  The rush to just put something out there and enter the iPhone lottery will disappear once more players enter the market and drive this quality standard higher.  Then the cost of getting your “crapware” application over the noise will be so great that it won’t be cost efficient to do it for several apps as is the case today.

Just a theory, but would love to hear some thoughts on the topic…

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