00:00:00 ◼ ► Welcome to Under the Radar, a show about independent iOS app development. I'm Marco Arment.
00:00:05 ◼ ► And I'm David Smith. Under the Radar is usually not longer than 30 minutes. So let's get started.
00:00:30 ◼ ► to be a bit more introspective to just sort of decide what you're going to do in the new
00:00:35 ◼ ► year. The calendar year is my accounting year and so while that doesn't mean anything, you
00:00:40 ◼ ► know meaningfully, it's also useful for me to look back at the last year in a more holistic
00:00:44 ◼ ► way, see what worked, what didn't, you know, where the business side, my income came from,
00:00:50 ◼ ► where it went up, where it went down. But as part of that, it seemed potentially a useful
00:00:55 ◼ ► time also to do kind of a like a back to basics series here on the show to talk about some
00:01:02 ◼ ► of the fundamental aspects of being a successful independent iOS developer. Like, you know,
00:01:07 ◼ ► in our little intro, we always talk about, you know, the aspects of independent iOS development.
00:01:12 ◼ ► And I think fundamentally, there's some aspects of that that are important to understand.
00:01:17 ◼ ► And I don't want to assume that everyone who listens to this show sort of knows these things
00:01:22 ◼ ► that I think I've been doing this long enough, you've been doing this long enough, Marco,
00:01:25 ◼ ► that we I think have a fairly reasonable handle on them, but they're like important. And then
00:01:29 ◼ ► also, the reason I this has been top of mind for me is the sense of, I need to make sure
00:01:44 ◼ ► or that the market hasn't changed, or whatever. And when I think about them, like the three
00:01:59 ◼ ► a three part series where we unpack each of those over the course of a different episode.
00:02:03 ◼ ► But I think at its core, like having a successful app business is about acquiring customers,
00:02:10 ◼ ► converting those customers somehow in sort of some form of monetization, whether that's
00:02:20 ◼ ► things inside your app, whatever that conversion means for you the actual like turning a customer's
00:02:25 ◼ ► time in your app into income. And then retention is having that then persist into the future.
00:02:35 ◼ ► make money from the customers you have, and you can't keep the customers you have, you're
00:02:38 ◼ ► not going to have a successful business. And so I think kind of working through each of
00:02:55 ◼ ► put anything out there in the App Store before, you know, you haven't run a business like
00:02:58 ◼ ► this before, you might think that the more technical aspects of app development are the
00:03:07 ◼ ► the app you're making? Oh, you're gonna, are you gonna write it in Swift UI? Like, that's
00:03:11 ◼ ► important to some things. But you can make the most amazing app technically, and it can
00:03:28 ◼ ► developer is how you choose what to work on, and then how you support it with these business
00:03:33 ◼ ► aspects, you know, around what you have built. You can write an app in the worst language
00:03:38 ◼ ► in the world using crappy UI frameworks and, you know, have it be like this whole non-native
00:03:44 ◼ ► whatever, all these things that we kind of frown upon as developers. And if you do have
00:03:49 ◼ ► the business chops around, you can make almost any technical pile of crap succeed, as you
00:03:54 ◼ ► can tell by looking around the App Store and seeing what succeeds. So anyway, so that's
00:03:59 ◼ ► why this stuff is so important, that ideally as developers we want the amount of work and
00:04:04 ◼ ► interest that we put into something, we want that to reflect, to be reflected in how well
00:04:15 ◼ ► So anyway, acquisition. This is a great place to start because when you're talking about
00:04:19 ◼ ► customer acquisition, I think you first have to ask yourself, are you building something
00:04:24 ◼ ► that a non-trivial number of people will even want? You know, before you can even think
00:04:29 ◼ ► about how you're going to get them to discover it somehow, there's a huge question of like,
00:04:36 ◼ ► do people actually want this? Is this compelling to some group of people? And then you have
00:04:42 ◼ ► to worry about how you find them and how you get them to look at your thing and pick your
00:04:51 ◼ ► And then how do you stack up in that market? And this is why I've told this story a million
00:05:01 ◼ ► was make a giant note document of like, here's my biggest competitors in this market. Here
00:05:20 ◼ ► clarifying for me because that helped me like realize, okay, what am I up against? How are
00:05:41 ◼ ► you're making an app is like, who is this for? And am I doing something that there will
00:05:49 ◼ ► Yeah, because I think intrinsic in that question, it's like the classic thought of like, what's
00:05:53 ◼ ► the pitch, right? Like, what is, if you have to summarize your application in, you know,
00:05:59 ◼ ► one sentence, what is that? And a you need to understand what that is, which is important
00:06:04 ◼ ► for the technical and like knowing what you're building in the first place. But two is being
00:06:09 ◼ ► honest with yourself of based on that description. How meaningful of a differentiation is that
00:06:15 ◼ ► from other apps that exist? How likely is that to be an attractive hook as you're trying
00:06:20 ◼ ► to be, you know, you show that to a potential customer, how is that likely to be an attractive
00:06:27 ◼ ► thing to them. And the more niche your pitch is, the important thing to understand there
00:06:32 ◼ ► is that necessarily will make it harder to acquire more users. And conversely, the slightly
00:06:39 ◼ ► awkward thing is the more general your pitches to the harder it will be to acquire new customers
00:06:44 ◼ ► as well. Like there's a sweet spot in between very general and very niche, where you can
00:06:51 ◼ ► have sort of the best leverage for acquisition, I would say, where you have this, you have
00:06:57 ◼ ► a interesting hook that's different and unique. But it's you not unique in the sense of it's
00:07:02 ◼ ► narrow, it's unique in the sense of it's compelling to a large audience. But it isn't just some
00:07:08 ◼ ► like just to just another to do list, right? It's like, if you're making a to do list app,
00:07:12 ◼ ► you need to have some thing about what you're doing, that is broadly applicable and desirable,
00:07:18 ◼ ► but is not so specific that it cuts off lots of users. And so like, that is a challenging
00:07:25 ◼ ► thing. And I think it's great to start there, the acquisition sort of thinking there. Because
00:07:36 ◼ ► it's easy, I think, sometimes to focus on the interesting technical sides of developing
00:07:40 ◼ ► an app, or you think you're doing something very cool, and very cool can mean, like, awesome,
00:07:47 ◼ ► amazing, super technically interesting, or groundbreaking in lots of ways, doesn't necessarily
00:07:56 ◼ ► you build something amazing, lots of people are going to want to use it on a day to day
00:08:00 ◼ ► basis regularly, like that's just, you know, are you solving a problem that people have,
00:08:07 ◼ ► and that people are going to continue to have. And that is, you know, something that's important.
00:08:12 ◼ ► And obviously, like, there's so many specifics in this. And I mean, we've been doing under
00:08:21 ◼ ► of nuance to this, but just broadly, for whatever the circumstance that you are find yourself
00:08:31 ◼ ► be desirable to lots of people, and you need to refine your idea? Or even if you have an
00:08:39 ◼ ► existing product, it's like, how are you marketing it is going to be filtered through what are
00:08:44 ◼ ► the things about what are the aspects of this that are desirable to the broadest number
00:08:53 ◼ ► Yeah, because like, no one cares how you solve the problem. And no one cares how long it
00:09:05 ◼ ► know, programmers like us, like, we take a lot of pride in how we do things. And it gives
00:09:14 ◼ ► won't care. And the amount of work you put into something is not necessarily, you know,
00:09:21 ◼ ► going to result in, you know, the amount of success you get out of it. So, you know, you
00:09:25 ◼ ► have to find markets that actually exist and that you can compete in. And that's why, again,
00:09:30 ◼ ► you look at the App Store. Look at what succeeds in the App Store. You know, there's all the
00:09:34 ◼ ► big company apps, they succeed for their own reasons. And then you look at what succeeds
00:09:42 ◼ ► photos for Instagram or whatever. Like, you know, it's something that does something that
00:09:46 ◼ ► is a fairly mundane thing that just happens to resonate with a huge number of people who
00:09:56 ◼ ► doesn't really matter if it's like a crappily made app with a $3 a week subscription. Like,
00:10:01 ◼ ► you know, that stuff doesn't matter to success, largely. What matters is, are you making something
00:10:14 ◼ ► acquisition comes in. But there has to be a market first. And if there is a lot of demand
00:10:19 ◼ ► for the kind of thing you are making, everything about acquisition becomes much easier and
00:10:25 ◼ ► possibly much cheaper for you. So, there's a huge upside to the business as well. Like,
00:10:30 ◼ ► you know, most, ideally, you don't have to do much marketing or advertising at all, because
00:10:35 ◼ ► those things are expensive and time consuming and complicated. And if there's a lot of demand
00:10:44 ◼ ► mostly market itself. You won't have to worry too much about this. But most of us aren't
00:10:47 ◼ ► that lucky. Most of us have to worry somewhat about how the heck we get people to learn
00:10:52 ◼ ► about our app. So, that's what we're talking about for the rest of this episode. But first,
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00:13:18 ◼ ► Yes, it's like that is the crux. And I think there are probably broadly, when I was thinking
00:13:23 ◼ ► about this, like three ways to get a customer. There's the sort of press/Apple featured
00:13:31 ◼ ► promotion, kind of the editorial, I guess you could say, an editorial acquisition where
00:13:41 ◼ ► the world that is sort of like sending that out and promoting your application or mentioning
00:13:52 ◼ ► of mouth version of acquisition, which is one of your users is the person who is spreading
00:14:22 ◼ ► Podcast ads, sure. I mean, anywhere that you're paying. So essentially acquisition, those
00:14:33 ◼ ► Is it an editorial voice? Is it your customer voice? Is it your voice? Like one of those
00:14:39 ◼ ► three is going to be the person who's actually going to sort of understand that. And I think
00:14:56 ◼ ► relevant for and obviously a very different cost and sort of reliability that goes along
00:15:03 ◼ ► So in the first one, in the like the editorial version of acquisition, typically these only
00:15:07 ◼ ► happen around big updates to your application, certainly on the press side. And the impact
00:15:15 ◼ ► they can have is shockingly small. Like it's one of those things where you would like to
00:15:31 ◼ ► certainly is something. I'm not saying it's nothing, but it is short lived and often very
00:15:36 ◼ ► disproportionate to the size of the audience of that publication. Like I remember, this
00:15:52 ◼ ► you know, like that newspaper, you know, in a drawer in my desk, because it was an amazing,
00:15:56 ◼ ► super cool, like I've arrived moment. And as far as I could tell, it drove no downloads
00:16:06 ◼ ► if you look at my sales chart, versus the week before and the week after when that article
00:16:10 ◼ ► came out, like it didn't seem to do anything. And like, that's fine in some ways. But it's
00:16:15 ◼ ► also like, is was that was clarifying for me of just because someone who has some audience
00:16:56 ◼ ► of that and the ability for it then to reach the actual person who's going to be interested
00:17:06 ◼ ► much weight into those kinds of kind of editorial things that are lovely when they're happy
00:17:11 ◼ ► with the application. You know, when people have the press reach out, I tend to be responsive
00:17:22 ◼ ► the press, reach out as much as you can, because any exposure you can get is useful. But really,
00:17:28 ◼ ► from a sustainable perspective, this is not something that will create sort of a sustainable
00:17:48 ◼ ► the press is, or consuming the press. Like, when's the last time you, as a person, were
00:17:54 ◼ ► reading a newspaper or website article about, you know, here's 15 productivity apps for
00:18:09 ◼ ► been published in some, you know, some publication, that's, it's more like winning an award.
00:18:13 ◼ ► It's an honor. It's nice. It can make you feel good. It can validate your work. It will
00:18:18 ◼ ► kind of put you on the map in the sense that some people will, over time, have a better
00:18:27 ◼ ► does not translate into very many sales directly. It's always a very, very small effect. If
00:18:48 ◼ ► there's so many leaps there. Whereas, like, the mechanisms that will put your app in front
00:18:54 ◼ ► of people in a different context at a better time can be way more effective, even if it's
00:19:04 ◼ ► So, for instance, an app store search ad or a Google search ad, like, those are way more
00:19:09 ◼ ► effective because those are capturing people who are actively looking for, hopefully, what
00:19:14 ◼ ► you are selling. You're going to get a more, a stronger response there. And then, the path
00:19:19 ◼ ► for them to convert, which we'll get to next episode, probably, but the path for them to
00:19:27 ◼ ► their browser, go to the app store, search for your app, like, all those steps are removed.
00:19:33 ◼ ► They can just, like, click a button and pay, and then they have your app. All that matters
00:19:43 ◼ ► It can very slowly build brand recognition and reputation, but it is not great for direct
00:19:50 ◼ ► No, not at all. And I mean, I suppose, you were just leading into it, but I think probably
00:19:54 ◼ ► you're talking about paid acquisition, which is another, in many ways is a version of editorial
00:20:01 ◼ ► acquisition. But it's the version that you pay to be there. Like, you could be featured
00:20:06 ◼ ► in the app store, or you could pay to be on the feature page of the app store. Like, both
00:20:14 ◼ ► billing and the same prominence in the app store as it is structured right now. And it's
00:20:32 ◼ ► the concept of paid acquisition is that you need to make more money from a customer than
00:20:52 ◼ ► Because if they aren't, you're just, you're just gonna run yourself into a hole. And there
00:21:05 ◼ ► than what a traditional indie app developer is trying to do. We're trying to make a sustainable
00:21:11 ◼ ► living for the long term. You very often I've seen these things, you know, it's like clearly
00:21:20 ◼ ► ads to acquire customers, either it's because they're trying to turn them into like, it's
00:21:30 ◼ ► trying to knock out other competitors. There's things like that, or it's I mean, this sort
00:21:46 ◼ ► like weekly $10 a month $10 a week subscription and try and sort of squeeze as much money
00:22:01 ◼ ► just need to balance it with your sort of lifetime value of a new of a customer to you.
00:22:09 ◼ ► And for many indie apps, based on the costs of search ads, for example, in the App Store,
00:22:15 ◼ ► it is I've found it very difficult to balance those two things in such a way that you come
00:22:26 ◼ ► has to be commensurately very high. And sometimes that can work and that works for you awesome.
00:22:43 ◼ ► like crank that wheel forever. But I don't think that's the way it works for most customers,
00:22:52 ◼ ► have to rely on other things then to acquire your customers or find other forms of paid
00:23:07 ◼ ► a generic ad, you know, ad that you're showing for a keyword in the App Store. Like, I don't
00:23:12 ◼ ► know, maybe that's the case, like depends on how specialist your app is, or how specific
00:23:21 ◼ ► I have on this Marco, but I found it to always be. It feels like I'm just throwing, you
00:23:30 ◼ ► you know, in some ways a question of my, you know, my monetization. Like, if I monetize
00:23:46 ◼ ► forms of paid advertising and paid promotion and everything for Overcast. And even Instapaper
00:23:58 ◼ ► I might be kind of, sort of, maybe breaking even, but even then, not always. And I don't
00:24:03 ◼ ► think I actually, I think I'm actually slowly losing money on that too. The problem is,
00:24:08 ◼ ► as you said, with paid advertising, it is way more expensive per acquired customer than
00:24:14 ◼ ► most indies realize. And again, you mentioned all the reasons why, like, you know, because
00:24:19 ◼ ► there are businesses out there who stand to make more money from a lifetime customer than
00:24:24 ◼ ► your business. That's it. There's a reason why, when you listen to podcasts or you look
00:24:29 ◼ ► at App Store search ads, you don't see a lot of indie app businesses repeatedly advertising.
00:24:35 ◼ ► You know, I've bought individual ads here and there on lots of stuff, or like, you know,
00:24:43 ◼ ► was losing too much money on it and so I've stopped. And you look around and indies generally,
00:24:50 ◼ ► more than once. There's a reason for that. It's just too expensive. And other companies
00:24:55 ◼ ► can make more money per customer. Like, if you're selling like web hosting, where someone's
00:25:04 ◼ ► kind of web hosting arrangement, then you can afford to spend, you know, $50 to acquire
00:25:22 ◼ ► going to be really hard to make money on with paid ads because there are just too many companies
00:25:28 ◼ ► that will outbid you. For any effective paid advertising, you will probably be outbid by
00:25:34 ◼ ► companies who can spend more than you because they will make more than you from each customer
00:25:44 ◼ ► if you have a high profit per customer business, that's great. Most indie apps are not that.
00:25:54 ◼ ► Yeah. And I mean, that which is challenging because that leaves us with sort of the last
00:25:58 ◼ ► form of acquisition, which is sort of organic word of mouth advertising. And I say that's
00:26:09 ◼ ► my apps and is the thing that broadly is the most reliable. But the difficulty of it is
00:26:15 ◼ ► that it tends to be much less than you would think it is or how big you would want it to
00:26:23 ◼ ► be, maybe. Like I was doing a bit of analysis before the show and it's hard to tell exactly
00:26:37 ◼ ► I suspect of people coming to my apps, especially if they if I look in the app analytics and
00:26:41 ◼ ► do the, you know, they're coming from search, they're probably coming, you know, because
00:26:50 ◼ ► hope for like word of mouth advertising to generate 5% of your like monthly active users
00:26:56 ◼ ► as new users each month. Say that was sort of based on my apps, that was the number that
00:27:01 ◼ ► kind of seemed to be about the right rule of thumb. You know, so if say you had 100,000
00:27:07 ◼ ► monthly active users, you could expect that to generate about 5000 new downloads a month,
00:27:13 ◼ ► maybe, like as a rule of thumb, I think that's a reasonable place to start. And that's a
00:27:23 ◼ ► anything and is certainly useful. But it is hard to meaningfully grow at that rate, because
00:27:34 ◼ ► customers just as quickly as you are gaining them, if you know you, the best you can do
00:27:38 ◼ ► is 5% as a gain rate. And so it's tough. And I think, like, I don't know where that leaves,
00:27:46 ◼ ► it's one of those challenging things I found with acquisition is, I think it is fundamental
00:27:50 ◼ ► and the only apps I've ever had succeed, sort of either had some other some some hook where
00:27:57 ◼ ► acquisition happened, or got to this critical point of word of mouth, where they it was
00:28:09 ◼ ► it was meaningful, and it didn't just sort of die out. And I think as an indie developer,
00:28:24 ◼ ► to acquire customers. So but it's reasonable for us to go into this with a clear eyed view
00:28:35 ◼ ► result, it's going to be an uphill battle. It's going to be difficult. And I think it's
00:28:47 ◼ ► challenging. But doesn't mean it's impossible, like you and I are both people who've made
00:28:53 ◼ ► But yeah, and you know, the organic, you know, word of mouth kind of acquisition, it is the
00:28:59 ◼ ► most elusive, it is the hardest to get, it is the hardest to measure, it is the hardest
00:29:04 ◼ ► to quantify or to control in or to influence in any way. But it's free. And it's very powerful.
00:29:16 ◼ ► so important for us to get customers and to keep customers. And you're right, that basically