Apps in the late stage gold rush

In the 1800s, they found gold in California. People flooded the state, hoping to strike it rich, abandoning everything and spending all their savings to go scrabble in the dirt.

Samuel Brannan didn't go digging.

[He] owned the only store between San Francisco and the gold fields — a fact he capitalized on by buying up all the picks, shovels and pans he could find, and then running up and down the streets of San Francisco, shouting 'Gold! Gold on the American River!' He purchased pans for 20 cents each and resold them for $15 each, making $36,000 in nine weeks...

This was especially true for the late stage gold rush, when there was less gold to be found, and people were more desperate to succeed like the ones who had been there first.

Guess what? We're there again.

Let's break down the costs of making an app.

So you have an app idea? So does everybody else. Let's talk about what it takes to actually make it happen.

Development

Initially, this is where you'll spend the most time or money, or both. But that's just the beginning. I'm going to use a native Apple app as an example, because that's what I'm the most familiar with.

• 100€ for your Apple developer account
• Either hours of personal time invested, or X0,000€–X00,000 in development costs, plus ongoing maintenance costs.
• Either hours of personal time invested, or X0,000€ in design/usability/asset creation costs
• You have to take into account, and decide whether to support the following:
  • iPhone
    • icon (making it adaptable to color changes)
    • widgets (various sizes, color changes)
    • lock screen widgets
    • dynamic island
    • standby mode
• iPad
  • totally different layout/sizes
• Apple Watch
  • various complication sizes and shapes
  • smart stack
• Various iOS versions
  • any of which, especially the new ones, will generate bugs to fix (I once ended up with a massive bug that took forever to fix because Apple removed an entire scrolling framework from their SDK that my app relied on, and did not replace it with anything)
• Desktop version
• Web version
• ANDROID

I hear you saying: I can just start with a basic iPhone app! My sweet summer child. If you leave some of these out, you risk bad user reviews, which can tank your App Store visibility. More on this later!

Marketing in the App Store

You'd think people would be able to just browse the App Store and find your app. However:

Your app will not show up in search under its name

Not until you have enough reviews, and regular reviews, which means enough downloads on a regular basis that enough new users will bother to do this, and ideally not just to make support requests. Which can leave you in this negatively reinforcing cycle:

• no one knows about your app
• because no one can find it
• so Apple pushes it further down the search results
• so even less people will find it

I have an app called Weel, and if you search for Weel verbatim, you first get a long list of apps called things like "Decision maker: Spin the Wheel" or "Happy Wheels" before you get to Weel itself. (In case you think this is a fluke, the app was called PiCal at first, and the same thing happened but worse; you got a list of "Picture taker" etc.)

Welcome to ASO and keywords

Where you show up in search depends on:

• Your app name/title
• Subtitle
• Keywords

It's not enough to just set and forget these.
You have to update them on a regular basis, and for multiple regions and languages. How are you going to figure this out? Does Apple provide a tool for this? No. Now you need:

ASO analytics tools

Expect to pay anywhere between 300€ and 3000€ annually for a service that lets you see how you're doing in the App Store, which keywords are performing well, which keywords you might want to try next...this alone is a job you'll find yourself wanting to hire someone for.

Expect to pay anywhere between 1000€ and 3000€ to have someone take care of ASO for you, on top of the cost of the tool itself. And remember, you have to keep doing this. You can't just pay someone once, this is a regular thing. Your competitors are shifting their keywords, Apple is readjusting its algorithm...it's an endless game of whackamole, and you have no guarantee all of this effort will pay itself back either.

Payment tools and related analytics

Speaking of payment,

Apple takes 30% of your profits unless you apply to the not widely advertised Apple Small Business program, in which case they take 15%. A court case has forced them to let devs offer the possibility web checkout to US customers, however conversion rates on that are not guaranteed.

You're going to want to do a lot more managing of payment possibilities than what Apple offers. (Among other things, Apple's analytics have a week long delay, which can be an eternity.) So now you need:

• Something like RevenueCat
  • to handle payments and payment related analytics which costs you 1% off monthly tracked revenue.
• I personally also use Superwall, which has actually been a worthwhile investment in my mental health because it lets you update paywalls in your app from the web, A/B test them, and generate targeted popups to particular user groups, without having to wait for another round of App Store Review. Costs 0,20€ per conversion after 250 conversions a month.

More analytics

You'll also want to keep track of:

• Crash reports (Firebase or Sentry)
• More usage details (Telemetrydeck)

Customer service

Another thing you may end up hiring someone for.

• Answering reviews
• Answering support chats/emails.

If you don't offer an easy way to contact you, people will use reviews as support requests, and that affects your rating, which again affects your visibility.

App store screenshots, assets, and localization

• Expect to spend time or money making and possibly translating and then A/B testing these.

Pricing your app

After all of the above, now you need to consider what to charge your users.

• If you charge a one-time payment, your support requests will increase while your income will depend on constantly getting more new users, which costs more money (acquisition cost). At some point, this ratio becomes unsustainable.
  • Note: if you don't offer any one-time payment options, expect bad reviews for not offering it.
• If you charge too much for a subscription, you'll get bad reviews.
• If you charge too little, this will not cover your costs. Because there will be more monthly costs than the costs described above.

General marketing

This is a whole other rabbit hole, with its own sets of expertise. Again, you may end up hiring someone, but most of the time expect to not get back what you paid. Marketing is a weird field where it's ok to do work, have the result of the work literally have no effect, and still walk off with the money.

A website

• A domain (costs some but not much)
• Unless you're going to build and/or design one from scratch and host it on your own server that you also maintain (which costs you time), you will need:
  • something like Webflow or Wix (X00€ a year)
  • possibly a custom theme (costs some)
  • possibly a blog platform like Ghost because Webflow's CMS is awful (X00€ a year)
• SEO site analysis/optimization (costs time or money to have someone else do it)

Social media content

You will often be told to generate regular social media content to promote your app as though this is quick and easy and free. It's not. Content creation is a full time job, and to make things viral you need to have:

• A grasp of story structure (Hook, payoff, call to action)
• Copywriting skills
• Video editing skills
• Graphic design skills
• An understanding of the culture of the platform you're posting in
• Ideally a sharp wit/sense of humor/charm

If you're missing some or all of the above you may be wasting your time. Platforms you need to consider:

• Facebook
• Instagram
• Tiktok
• Reddit
• Your blog. Yes, in order for your website to be found, you have to keep updating your blog, ideally with correct keyword content that will make the algorithm/AI search engines happy, which is its own skillset. For example, to feed the algorithm, this post should have been titled something more like "How do I make money with my app" or the like, but honestly as a former English teacher I just...I just can't.

Expect to pay someone, or multiple people, X,000€–X0,ooo€ a month for this. Also note: if you go cheap and hire someone who doesn't actually quite have the necessary skills, you may actively be doing your app more harm than good.

Advertising

• Apple Search ads
• Google ads
• Facebook ads
• Instagram ads
• Tiktok ads
• Reddit ads
• Influencer marketing
  • contacting them and trying to get them to answer you
  • getting a return on your investment (they may charge X00€–X000€ for one video which may only get you ten clicks)
• User referral systems (cost: development and possibly a commission from each conversion)

Managing these ads, optimizing them, A/B testing them and so on is yet another subskill that you probably don't have, so that's another thing you may end up hiring someone for. (X,000€–X0,000€ a month)

Bonus: Press releases, getting featured by Apple and so on.
Helps if you know someone in media or at Apple. Yet another subproject.

Adding it all up

If you skim all of the above, you'll notice you end up having a whole pile of costs, plus a cut into your profits from every side (Apple takes 30-15%, additional services take more) AND you are at the constant mercy of reviews, which can be affected by bugs, or unhappiness with your pricing, or even a user simply not knowing how, say, iOS widgets are installed.

Meanwhile your only source of income is user subscriptions, and Apple has trained users to expect apps to cost a one time purchase of 5€, the equivalent of a cup of coffee in both price and perceived value. Meanwhile Apple increases the complexity of development with tools that don't necessarily work (Xcode also has bugs), and the environment of the internet itself demands that every product come with relentless content creation to the point of repetitive saturation.

The ratio does not look great.

I've been hanging out on the r/Sideproject subreddit for a while, and I've noticed several posts offering services like "I built a tool to make a landing page with optimized SEO" or "I built an AI content creation tool" or "I will teach you how to monetize an idea". These, my friends, are the tool sellers, and they shall inherit the earth.

Postscript

You may wonder, based on this, if all this means I am abandoning the app I'm working on. It doesn't, but simply for this reason: I've gotten so much feedback from users saying it's changed their lives and helped them feel less like a failure ("this is like putting on glasses or getting a hearing aid for the first time!"), that I simply want it to exist (ideally while sustaining itself financially). It's a project that makes the world a bit better, not one that will rake in cash, and I'm ok with that.

Meanwhile if I had an app idea that I only wanted to make because I was sure it would make me rich, I'd think twice. Good luck out there.