As a new developer it can be frustrating to generate self-sustaining revenue by competing with apps on the “global market”. It is largely a matter of supply and demand, where the number of app of potential interest to “anyone” can make it difficult to reach someone – because everyone else is trying to do the same. There is the potential to achieve better, even faster, revenue through apps for your local market. The kicker is that once you have a functional app for one local market, you have a template for many other local markets.
One type of local app can be likened to a “community portal” – representing area establishments, businesses, sports, clubs, etc. You will likely want to apply a theme to it – related to sports, community, entertainment, etc. It could be presented as much as a game or utility, or both. Conceptually, this is far from new, there are plenty of examples out there that you can draw some inspiration from. The core component is monetizing your app under this model.
Market Research is Required. If you run with sports, you will want to know which sports to target, how many local high schools, colleges, and private leagues are in close proximity to your target city. Your theme can just as easily be focused on night clubs, local bands, general business, education, religious or charitable organizations. To qualify the potential of your “theme”, you might also physically survey their activity levels – frequency of events, number of special events, attendance levels, etc.
The larger the local population, the better off you are. While you might want an app for a small town, you would likely want to broaden your target to encompass a county or district.
Define Your Possible Revenue Sources. It is important to be creative in listing out all of the “even remotely possible” sources of revenue that could be associated with your app.
With creativity, almost “anything goes” – these days you don’t necessarily need a product to have a product, just as long as you know and have an agreement with someone who does. Your role is to promote their business through your app. The difficulty, as we know, is that there are so many apps, that they are often given away for free. It is difficult to monetize free, but not impossible. Functionally, it is much easier to monetize something when you know where it fits and how it interacts with everything relevant to it.
Define Your Breakeven Point. Include your projected development time and all the expenses associated with developing your app. You want to know in advance how much you will need to generate before starting on your app so you can evaluate whether the market will bear it – whether just $5k or $25k.
Knowing how much you will need can help you define how much you would need to raise from each possible source of revenue. Conducting a survey of local people about how likely they would be to spend money on any aspect of your app will provide you a better basis for assessing the potential of the revenue components.
If you estimate that you will need $10,000 for your app and you know that you can likely get $3 from 1,000 local subscribers, then you have some basis for considering the VIP upgrade for $30 to possibly 20% of them. That wouldn’t be out of the question for a developed market with a population of over 250,000 people. That accounts for $2,400 + $6,000, leaving you theoretically shy of $1,600 from your base target.
You can then look at other means of revenue or possibly expanding your target market to pick up the shortfall. The goal is to find as many revenue streams as you can, so that if one falls short, another can pick up the slack.
By working with local areas businesses and establishments, you substantially increase your total marketing capability. If your app helps a business connect better or more frequently to their existing customers, and help bring them new customers, they are likely to promote it. You can offer to help them by providing the content to make it easy for them to do so.
Repeat. Once you have one app that shows signs of success for one area, you have the capacity to bring it to other locations. That’s really the true goal, because the vast majority of your development cost is already taken care of. All you need to do is create another version of your app that focuses upon a different theme or location. That’s likely to include just graphical and text adjustments – and then the networking and relationship development efforts to get new businesses on board with your new app.
However, now that you have one successful app out there, you can sub out for a community relations manager to help in building up the client base for your new app. By showing that it works in one location provides reasonable basis that it can work in other locations of a similar demographic and business breakout. Moreover, you are not limited to working on just one new app at a time, but can aim for doing the same for multiple cities or counties. In short, you don’t need to go global to be profitable.
Back in the first stages of the “global financial crisis”, an idea came to me that I presented as a 22 page “open source business plan” under a slightly different name. That was in 2008, and now I would like to submit the core points of that plan to mobile app developers. The idea can be defined in different ways – “Information Crowdsourcing”, “Social Networking Management”, or any number of others. Take from it and apply to it as you like.
Core Issues – The Problems
Social networking requires time searching for relevant people and data. Social networking is also substantially segmented by hundreds of social networks of scale (Facebook, etc.) and thousands of other smaller ones. It does not help to search on LinkedIn if the people you are searching for are not there. More time is spent searching than making decisions or acting upon the data found.
The Internet is a means of connecting people with people and information. Where there is an extreme supply and demand for information, there is a relative lack of tools to reduce saturation and increase relevancy.
Social Networking is a very personal function. Heads of state have ambassadors. Even ambassadors have vice-ambassadors.
Per Wikipedia – Six degrees of separation is the theory that everyone and everything is six or fewer steps away, by way of introduction, from any other person in the world, so that a chain of “a friend of a friend” statements can be made to connect any two people in a maximum of six steps.
The Internet and Networking ultimately has the potential to reduce this to being 1-2 degrees of separation. That is saturation and it hinders relevancy. The decline in relevancy can be cited as basis for the declining effectiveness in television, radio, and newspapers. People are wanting increasingly specific vs. very general information.
U-Borg – Help Customers Connect with the Right People and Information in a Timely, Efficient and Actionable basis.
John sells Specific Stuff. He wants to connect with other people who buy and sell the Same Specific Stuff – regardless of their language or location; or maybe he wants a specific location but where everyone speaks a different language.
He could spend a lot of time searching for this or he could sit back and let people feed it to him. This is a very basic situation and there are all kinds of ways John could go about it, now. But how actionable is the information he finds going to be? How efficient is it for him to be doing that research? How efficient is it?
The aim is not simple “lead generation” – but something more like Help A Reporter Out, except even more specific in focus and detail. HARO makes it easy for journalists to find sources for information – spanning any topic. On a business basis, it enables all contributors to the network the potential to monetize “what they know” and/or “who they know.”
The simple point is that information is a commodity, it exists in abundance but is relatively difficult to monetize unless you are able to achieve very good matching. Whether sourcing information, making industry specific introductions, the business concept is readily given to be extremely niche specific while not confined to the likes of “one network.”
Numerous possibilities for monetization exist, both for the business itself and for participants on a crowdsourcing basis. These consider everything from personal introductions, information sharing, personal assistant services, or bundles on a pay per use, package or monthly subscription basis.
[Note: Reading through this, I realize a few things – a) that it differs significantly from the business plan fleshed out in 2008; b) that the overall idea may be somewhat nebulous, but c) the core principles are the same and even more pronounced now then they were then. The need for “ultra specific information” is only increasing; so is the ability to provide it – but it is the “matching of supply with demand” that is still a long ways from being optimal.]