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.
Today, we feature an interview with Victor Shaburov, Vice President of Storefront Services at Opera Software. For some history, Victor was co-founder of SPB Software House and the founder of Handster. Victor graduates from St. Petersburg State University with a M.S. in Computer Science and Mathematics. We cover some of the history of Handster leading up to Opera Mobile Store.
Developers should find some interesting and very valuable tips in consideration that Victor has led two very successful mobile/tech start-ups. There are many more questions we wanted to ask, suffice that we don’t intend for interviews to be one-time events.
Without further adieu…
Mark: At the moment you are in Sunny San Mateo, California. As it is the middle of January, is it still sunny there?
Victor Shaburov: Yes, but shortly we will have a short rain season starting.
Most of the time the weather is great – you know, IT entrepreneurs selected a great place for running businesses.
Mark: As noted in the introduction, you are the founder of Handster.com which was the leading independent app store for Android when it was sold to Opera. So going back a bit, what first got you interested in the mobile app market? How long after did you start Handster?
Victor: Even before Handster I worked for Spb Software company (recently acquired by Yandex) and we were developing apps for PDAs at that time.
Reaching end-users was difficult, they mostly came from developers’ websites, so we decided to try to create a marketplace where users can view different apps and buy them. That was kind of like the iTunes App Store, but long before iPhone existed.
At that time only 4% of users were installing 3rd party apps; we wanted to reach the other 96% of the people.
Mark: Your ideas and plans were obviously quite successful as Handster was purchased by Opera in January of 2012. Were you surprised by this development or was that part of your plan all along?
Victor: I was not looking for an acquisition and even initially rejected talking with the Opera guys. But they were quite insistent and made a great offer, so I changed my mind.
We become part of a very aggressive and successful company, which is showing fantastic growth over these last years. And Opera benefited from having a store inside their browser, the ability to increase loyalty of end-users, and also monetize them.
Mark: What’s the biggest change did the transition from Handster to Opera Mobile Store have organizationally?
Victor: The great part is that Opera kept the unit function for these 2 years on our own. And we received fantastic help from their marketing, legal and sales sides. We used existing Opera connections to reach mobile carriers and offer our solution.
As a result, we launched new carrier stores for such operators like TIM Brazil, MTS Ukraine, MTS Belarus, partnered with Yandex on Yandex.Store launch and helped other partners like RIM, LG to grow their developer base.
During this 2 year period since the acquisition, our number of monthly users has grown from 18 Million to 100+ Million (this is 230% annual user growth)
The number of applications on the store has increased from 36,000 to 200,000+ apps.
We were able to achieve such results thanks to the great help from other Opera teams.
Mark: Out of curiosity, what kind of mobile device do you use most personally and what kind of apps do you use most often?
Victor: I’m an iPhone 5s user. I mostly use email, some news apps, banking and, of course, Opera browser – which is very fast especially if you travel a lot and have to work on low speed networks.
Mark: You’ve lived in several different countries – Russia, Germany, the United States – and California almost qualifies as its own country, plus Ukraine. With this kind of international experience, what are some things that you think developers from different regions would most benefit from in their development and marketing for different markets?
Victor: Developers should do app localization – that definitely increases usage in local markets.
By localization I mean not just translating texts, but also paying attention to local specifics. For example, if you distribute to India, most popular sports are cricket, movies are from Bollywood, etc.
Another small localization trick – we had to promote a dating app in Kazakhstan – and made a banner with Kazakh girls for it. The CTR conversion increased 3-times.
Also, try to find as many distribution methods as possible. Our store has mostly non-USA users – and it is a great place to reach users in countries, like India, Russia, Brazil, Indonesia, Mexico and others.
Mark: Which country do you find especially interesting? What special challenges and advantages do you see with USA vs Ukraine?
Victor: Well, every country has its cons and pros.
The US is great for business development, and American people are best customers for the app, if you are looking from a monetization prospective.
Ukraine has a very strong pool of highly educated software developers and comparatively reasonable costs of running business.
So, we did combine these two countries at that time of Handster, developing the storefront in Ukraine and running it for US and international audience. It continues working well after we became part of Opera.
Mark: What do you believe is the most valuable reason for a developer to advertise through OMS?
Victor: We have people – 100M monthly users. And we can run developer marketing campaign also on the Opera browser homepage, reaching even more – 260 Million monthly users.
If a developer wants to acquire a lot of users fast – we are a great channel for this. Plus we are also a direct source of traffic, no middleman agency is in-between which makes such campaigns most cost-effective.
And, of course, we provide developers with flexible tools to configure a campaign for a platform, country and even a device or carrier. Developer can view downloads and spending in real-time through our tracking online reporting.
Mark: Just a few months ago, the Internet.org initiative was announced by Mark Zuckerburg of Facebook in conjunction with Opera and several mobile device OEMs. The goal of Internet.org is to bring reliable internet service to people who don’t yet have access to it – largely through expanding mobile service reach. What kind of role or roles do you see for Opera Mobile Store in the kind of future Internet contemplated by the Internet.org initiative – an Internet with over 7 billion people?
Victor: Opera browser is already servicing a huge number of users especially in emerging markets, like Indonesia, India, Nigeria where networks connections are not allowing users to browse the internet using other means. The browser has optimized network traffic by approximately 10 times, making browsing affordable and fast in such and other countries.
Our store provides a fast way to find apps and download them for people.
Mark: Well… we covered a lot of ground, but it just would not be right to finish this without trying to feed hungry minds in a more literal way. What is your favorite dessert of all time and where did you discover it?
Victor: I’m vegan, so for the dessert I usually eat some fruits. The most tasty fruits I tried were probably in Hong Kong – I liked local cherimoya and pitaya very much.
From my personal experience, Victor is very clued in on today’s tech world and in every way a true gentleman. I greatly appreciate his time in doing this interview and again, hopefully we’ll be able to get him to come back for more.
If you would like to connect with Victor Shaburov, you are welcome to reach him on Linked In.