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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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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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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