Archive for July 2010

Twitter Weekly Updates for 2010-07-25

  • “The Chemist” Dileep Rao excellent analysis of Inception http://bit.ly/aom1VB #
  • Companies are astroturfing reviews of their own iPhone apps on App Store. Not surprising, but disappointing. #
  • “A new kind of grammars that can produce the empty language is designed in this book.” Indeed. http://amzn.to/bQWktb #
  • Oh. So _this_ is how a sewing machine works http://twitpic.com/27fzip #

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Twitter Weekly Updates for 2010-07-18

  • Manhattanhenge is today: http://en.wikipedia.org/wiki/Manhattanhenge #
  • I’m guessing every attendee at PDC10 gets hardware running Windows SlatePad Foundation Services. #
  • The lazy plotting of WW2: http://squid314.livejournal.com/275614.html #
  • I write like Dan Brown when blogging, Raymond Chandler for publication: http://iwl.me/s/fe11a92f #
  • Even if it’s just for the show finale and not a whole season, they should have Ricky Gervais’ David Brent take Carrell’s Office job… #
  • Pondering how to get order of magnitude bump in Kona tour guide app sale. Suggestions? http://bit.ly/cHq6L2 #Hawaii #
  • Just got “Pro iPhone Programming with MonoTouch” w00t! #
  • No, it ISN’T “Back to School Time.” #
  • Kailua Kona iPhone Travel App http://bit.ly/dueNmP RT on July 15 to enter lottery for 1 lb of 100% Kona Coffee #
  • Kailua Kona iPhone Travel App http://bit.ly/dueNmP RT on July 15 to enter lottery for lb of 100% Kona Coffee #
  • Hitler hates undisciplined C developers http://gamesfromwithin.com/the-const-nazi #
  • Very happy I saw Inception before reading reviews. Trailer and unavoidable buzz told me a little, but good one to see w/o preconceptions. #
  • The coqui frogs are advancing downslope. Found one _below_ us last night. I feel like Heston in “The Naked Jungle” http://imdb.to/rlyPq #

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iPhone App-Trepreneur: Part 3 — Cost Control

“50 cents income, 51 cents expenses: Poor man. 50 cents income, 49 cents expenses: Rich man.” — Mark Twain [1]

Previously, we saw that the average paid iPhone app generates a little under $6,000 and that you have a 50-50 chance of making something considerably less than that. Of course, it’s one of the privileges of entrepreneurship to dream of shattering the averages, of writing a blockbuster, of ending up in Costa Rica eating dolphin sushi and hanging with lady singers [2]. And, if you’re young enough, that might be enough for you. But if you’re a little older, and a little less confident that the universe will reward you just because you’re totally awesome, you have to figure that it might take you a couple of times up to the plate before you hit one over the wall. [3]

So, what can you build for a few thousand dollars?

If you’re a professional programmer, you know that the answer to that is : “Not a heck of a lot.”

How many hours equals an investment of “a few thousand dollars”? That depends on your circumstances, of course, but it’s a timescale measured in weeks, not months.

To me, this is one of those constraints that spur creativity. It should remove from your mind all temptation to explore some new domain that you don’t know much about. Instead, you should think about… Well, to be honest… A Web site.

Now, you might say to yourself “A Web site? But small creative folk don’t make money on the Web! It’s a fine outlet for expression and perhaps it’s an important part of marketing, but in terms of paying for my next 6-pack of Fire Rock Pale Ale… That dog don’t hunt!”

Forget the device itself. The reason the iPhone is appealing to entrepreneurs can be summed up in two phrases :

  • Micropayments
  • Walled Garden

Micropayments

Back when we were young and foolish [Redundant -- Ed.] writers embraced the Web because we saw a bright future in micropayments. We’d write our articles, people would pay a dime to read them and, all-in-all, we’d make more money than we did writing for magazines. For instance, back in the early 90s, when I was a magazine editor, we used to pay around $800 for a computer programming article. Our circulation varied over the years, but we can use 80,000 and not be too far off. So as a writer, you made about a penny per reader.

For whatever insanely stupid reason, the banking industry didn’t create micropayment services. (To be fair, destroying the world’s economy while creating no actual value can take up your whole workweek. And weekends in the Hamptons don’t just happen by themselves.) Instead, this Northeastern undergrad named Shawn Fanning wrote this program called Napster.

Digital music went from being a novelty to being a pain in the ass for every technical manager in the world. “We need another T1 line! All our bandwidth is gone!” you’d tell the accountant, only to learn that someone in BizDev had ripped the complete Abba discography.

In 2001, Apple released iTunes and, soon after, the original iPod. The world that we know today, where if you hear a catchy tune, you’re an impulsive click away from spending $0.99 and getting a legal copy may not have been invented by Apple, but they made it a reality.

Seven years later, when Apple released the 2nd Generation iPhone, they made software programs as easy to buy (and generally as cheap) as MP3 singles.

The AppStore, and its Apple-mediated micropayments, created a new sales channel to a vast potential audience.

Walled Garden

If you’re a musician, your experience may well belie this story of a new gold rush. Recording contracts and publishers may have been scoundrels and thieves, but at least there was some money to be made selling your music. The common wisdom nowadays is that recordings are far less important than live gigs.

There’s something to be said for giving away your apps as marketing tools. Just as every retail company nowadays pretty much has to have a Website, every retail company will eventually have to move to having a presence on mobile devices. (Of course, the easiest way to do that is to make your Website friendly to mobile devices, but that’s another story).

There’s also an emerging story about ad-supported apps. Apple’s recent launch of iAds is very interesting, although no numbers are yet available on results.

But the main way that apps differ from the Web is that apps are difficult (not impossible) to pirate and the habit of piracy has not established itself the way it has with music and movies.

If you put up a Website that contains, say, a helpful collection of instructions on knot tying and invite people to contribute, you won’t make any money. If you did start making money (because your photos showed nekkid ladies tying them, or whatever), your content would be pirated and put on other Websites.

If, on the other hand, you put your helpful knot-tying instructions in an iPhone app, you could charge $4.99 for them ([4]). Although it would be possible for a resourceful programmer to steal your content and put it on the Web, they would not be able to resell your content on the App Store (technically, they might be able to get away with it until someone noticed the identical content, at which point Apple would intervene.)

Whether the “walled garden” that Apple maintains around the App Store and retail sales is a net good (at least some assurance of functionality and safety) or a net bad (too much control, too little transparency) is a matter of debate. But the fact is that Apple’s distribution channel is established, widespread, and active.

So, although you can’t create complex software for few thousand dollars, if you’re a creative person, you probably can create something potentially interesting for readers / viewers / listeners.

Think “Web site” not “Software Program.”

A good example of what can be done economically is my “Kailua Kona Tour Guide: In My Opinion” app. This

Next: Tools for creating iPhone Applications

FOOTNOTES

[1] Or words to that effect. And maybe it wasn’t Mark Twain who said it.

[2] Jean Ralphio — Parks & Recreation

[3] Unless, of course, you’re Daniel Nava

[4] Animated Guide to Knot Tying


  1. Prologue
  2. Part 1: Desperately Seeking Ka-Ching
  3. Part 2: Opportunity Always Ring-Tones Twice
  4. Part 3: Cost Control

Twitter Weekly Updates for 2010-07-11

  • Apparently no one came in to work on their weekend or day off in order to review my iPhone app. Someone get Steve Jobs on the phone! #
  • Alien vs. Ninja http://www.youtube.com/watch?v=7M_QC2fatXQ (Man, you just know they’re going to ruin the book…) #
  • Happy aphelion! http://bit.ly/bH0Skp #
  • iMovie sucks. That is all. #
  • Lingle vetoes same-sex civil unions. Pity she’s a lame duck and we cannot fire her on election day. #
  • Why I value Editors: My iPhone app has a typo in a screenshot that’s on the front page of its app store page. I suck. #
  • You would think that every beetle species would have evolved the ability to right themselves when upside down. And yet… #
  • OData browser written in MonoTouch — http://hnsl.mn/cippdz #
  • Power out in Kalaoa #
  • Lingle’s civil union veto spurs talk of boycotting Hawaii for vacations. Understandable, but of course many here hurt support equal rights. #
  • Inouye, now 3rd in line to Presidency, gets 24×7 security. Q: Where for lunch? Must scan. A: Zippy’s. http://www.msnbc.msn.com/id/38143132 #
  • Discovery of multicellular life 2+Gyrs ago (50% to origin of life) is huge re search for ET. Removes fear multicel was fluke. #
  • Wish all publishers had discount for paper + eBook bundle purchase — I’m looking at you @wrox #
  • Holy moley! I think I drove by the police marking the unexploded ordinance on Saddle Road last night at ~1AM. #
  • 1st they came for Salman Rushdie & I said nothing because I was not Salman Rushdie… Then they came for my vuvuzela… http://bit.ly/daPcv0 #
  • Paul the Octopus has predicted the outcome of 6 games? Wow, the odds must be like a million to one against that. #
  • Friends of mine at Easter Island Eclipse. Aug 21 2017 — mark your calendars, North America! http://bit.ly/3LVFz #
  • —–< #
  • Vuvuzela emoticon. Use with joyful abandon. —–< #
  • I bet every moai on Easter Island has a little cluster of carefully aligned cameras beneath it this morning, like sacrificial offerings #
  • My friend @ironwood is serializing his novel online at http://ironwoodwind.blogspot.com/ #
  • Kailua Kona iPhone Guide: My app now available for sale http://bit.ly/cHq6L2 #hawaii #kona #iphone #mt #
  • All hail Paul and his cephalopdic omniscience! —–< #
  • I, for one, welcome our new cephalopodic overlords #

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Focus is hard at night

I took this shot Thursday night up at Mauna Kea. I thought I was doing really well with the photography, but when I got home and imported the images, all of them were blurred. There wasn’t any wind, and I thought the scope was polar-aligned well enough, so for the moment I’m blaming this on manual focus.

The purple stuff is digital sensor noise, which I find kind of shockingly high. I took a “dark frame” (photos of similar exposure, but with the lens cap on) and can use Photoshop to subtract out the noise, but it’s not worth it for a fuzzy photo like this.

dsc-6378.jpg

To give you a sense of what can be done with modern digital cameras, great lenses, Photoshop, and talent, take a look at this amazing photo

Ad Hoc iPhone Deployment With MonoDevelop / MonoTouch

My tutorial on the oft-confusing world of iPhone ad hoc distribution:

http://www.knowing.net/index.php/monotouch-ad-hoc-distribution-tutorial/

iPhone App-Trepreneur: Part 2 — Opportunity Always Ring-Tones Twice

“Sir, if you have a milkshake, and I have a milkshake, and my straw reaches across the room, I’ll end up drinking your milkshake.” [1]

The biggest milkshake in the software world is Microsoft’s. For 20 years, if you wanted to make money by writing retail software, you did so by targeting Microsoft operating systems: DOS and then Windows and then Vista (just kidding about that last one!).

In 2007, Apple introduced the iPhone. At the time, Steve Jobs said that there was no need for 3rd party developers to directly program the device, that instead they could program awesome iPhone-enabled Websites that would be just swell. No one liked that idea.

In July of 2008, Steve Jobs opened the iPhone SDK to general development and announced the creation of the iTunes App Store. In its first three days of availability, users downloaded more than ten million small programs from Apple’s brand-new “App Store.”

In April 2009, a little less than 2 years later, the number of app downloads exceeded 1 billion. Five months later: 2 billion. 3 months later: 3 billion. In June of 2010, at the introduction of the 4th generation iPhone[2], Steve Jobs said that Apple had crossed 5 billion downloads. That’s a pretty good growth curve:
appstoresales
That’s about 10 million app downloads per day. To give you a sense of proportion, there are about 3 billion books sold in the United States every year.[3]

Apple has been drinking Microsoft’s milkshake.

About 25% of apps are free. Free apps are far more likely to be downloaded than paid apps (no surprise), but at the same iPhone 4 launch, Jobs said that Apple had paid out $1 billion in royalties to iPhone developers.

He also said that that in June 2010 there were 225,000 apps in the App Store; implying around 170,000 paid apps. OK, so $1,000,000,000 / 170,000 apps == $5,882.35 average revenue per app. That’s a glass half-full, glass half-empty number. Hit apps can make much, much more than that — at least 1 app has made more than $1,000,000 (Major League Baseball’s At Bat). So that means that the median app revenue (50% of apps make more, 50% make less) is certainly lower than $5.8K. On the other hand, several thousand dollars is not chicken feed — it implies that even if you don’t score a “hit” with your app, you might be able to recoup your expenses and time investment — as long as you keep your development costs down!

Which, not coincidentally, will be the subject of our next spine-tingling update!

Footnotes

[1] This was originally said by Senator Albert Fall in an explanation of the Teapot Dome Scandal, but it’s unlikely he said it with the elan demonstrated by Daniel Day Lewis in “There Will Be Blood.”

[2] Closer to the fifth generation, given the differences between the iPhone 3G and 3GS.

[3] This is comparing global app sales to US book sales.


  1. Prologue
  2. Part 1: Desperately Seeking Ka-Ching
  3. Part 2: Opportunity Always Ring-Tones Twice
  4. Part 3: Cost Control

Apple Surpassing MS Market Cap: My Latest Column

My most recent column for SD Times questions the rationality of Apple having a higher market capitalization that Microsoft.

iPhone App-Trepreneur: Part 1 — Desperately Seeking Ka-Ching

You cannot get rich selling your own time.Scott Adams[1]

You can, however, make great fortunes selling things. When I was a kid, there was a girl in school who was heir to a pencil fortune; every time you took a standardized test and filled in one of those ovals completely, her accountant smiled. I don’t know how much more money there is left in building a better mouse trap, but an iPhone app that makes farting noises can pull in “more than 10,000 dollars per day.” [2] (more, mind you).

In 2002, I wrote a book about programming. It so happened that my book contract very explicitly gave me all electronic rights for publication; this, while unusual, was not considered a big deal back in the mid-late ‘90s when the contract boilerplate that I essentially inherited was created. This was right after the dot-com boom and developing an eCommerce Website was still somewhat esoteric. Were you to poll a group of small companies that sold specialized products online, the average cost of developing an eCommerce Website in the early 2000s would certainly be in the tens of thousands of dollars. (“Somewhat esoteric…high average cost…” This is going to be a theme.)

So, I wrote a simple little eCommerce Website. The coding was simple, as it was something I had done before. The harder part was aiding my bank in understanding the then-odd idea that this company run out of a cottage on Creek Road was going to be generating tiny electronic deposits throughout the day and night. and sold the electronic copy of my book at a bunch of pricepoints (If I recall correctly: $3.95, $5.95, and $11.95). Two important things need to be noted here:

  1. It was considered indisputable that an electronic version of a book was considerably less valuable than a print version of the book, but it was evident to everyone that some amount of revenue was possible from eBooks, and;
  2. My royalty on the first several thousand copies of the print book, whose cover price was $49.95, was about $3.75. In other words, I made as much money on the cheapest electronic version as I would on the print version.

The most important thing I did was write the software so that every time I made a sale, my computer played a cash register “KA-CHING” sound.

I’d be sitting at the computer writing the book or working on some code and I’d be distracted by the “KA-CHING.” But that was okay — it spurred me on and there are worse ways to be distracted. Much more importantly, I’d be eating dinner and talking with my wife and off in the distance — “KA-CHING.” Sitting on the couch watching TV — “KA-CHING…KA-CHING…” And I’d apologize to my wife and go over to the computer and turn it down (but I’d usually try to leave it at a just-barely-perceptible-to-me level).

Sales weren’t great; it was hardly like living inside a pachinko machine. But if you make your living selling your time, there’s no KA-CHING except when you are on the clock. Eating dinner? No KA-CHING. Watching TV? No KA-CHING. Sleep, checking baseball scores, walking the dog? No KA-CHING.

This was a profound realization for me. At the time, I had a wonderful dog who needed (and got) an hour-long walk every day. For the first time in my life, when I came back from that walk, I was (by a small amount) richer than I had been when I left. Not as much richer as I’d have been had I neglected Cheyenne and spent the hour on the clock for someone, but that wasn’t an option.

Being a fool, I mentioned my situation on a mailing list for authors and publishers. And, apparently, it caused quite a kerfuffle at the publishing company that was about to squeeze a bunch of ink onto a whole bunch of dead trees in order to produce something with a $49.95 cover price. No one knew how much money an eBook was worth, but publishers sure as hell weren’t happy with the amounts I was charging. Being, as I said, a fool, when they demanded that I stop selling the book electronically, I complied immediately. I thought we could work something out (again: Fool). It all ended in tears. [3]

In the end, I vowed two things:

  1. If I ever again spent 10 months writing a book again, it damned well was going to be a novel, and not 1,184 pages on C# programming.
  2. One day, the KA-CHING would be mine again!

Stay tuned for more heart-pounding entrepreneurial advice from a self-described Fool! Tomorrow’s Episode: Opportunity Always Ring-Tones Twice!

Previously:

iPhone App-Trepreneur: Prologue

Footnotes:

[1] Unless you’re a doctor or lawyer. Both of which are professions that use strict licensing to forbid (or at least highly discourage) competition from smart people who live overseas. Which is something that’s always cropping up in software development circles under the guise of assuring “professionalism.” Uh-huh. Because if there’s one thing that the past decade has proved, it’s that companies recognize, reward, and seek out professionalism and not the promises of low-bid incompetents.

[2] http://www.thedailyshow.com/watch/tue-july-21-2009/ifeud

[3] Lawyers got involved. Which is short-hand for “the guy in the little cottage on Creek Road got screwed and humiliated and paid for the privilege.”


  1. Prologue
  2. Part 1: Desperately Seeking Ka-Ching
  3. Part 2: Opportunity Always Ring-Tones Twice
  4. Part 3: Cost Control

iPhone App-Trepreneur: Prologue — In Which Our Hero Laments The Loss of His Mojo

You may have noticed a dramatic shift in my online presence over the past few months. At the beginning of May, I more-or-less shut down Twitter, flushed the cache from my RSS reader, and stopped watching Red Sox games on MLB Live (well… mostly). This was in service to the regaining of my mojo, which I had lost (or least let wilt).

Although I make my living by consulting, I screwed up pretty royally in the past 2 years — allowing myself to switch from a consulting role to a contracting role[1]. While you can make better money contracting (because you end up working long hours writing code rather than jumping in and out providing answers), it’s a big mistake for US and European developers. If you want to have people pay you First-World wages for your development skills, you have to stay ahead of the mainstream. If you are contracting, you inevitably focus in on a single development stack, a single paradigm, and a single problem domain. Email queries to you about availability and recent articles slow down and that’s fine, because you’re too busy with your contract to help people for free. And your livelihood becomes overly dependent on one or two customers. If, in the face of an economic slowdown, they decide to cease investing in advancing their infrastructure, you no longer have an Inbox full of recent questions to work for leads.

Tempting as it is, I am going to skip further discussion of lessons learned and mistakes to avoid…

And move on to the thrilling tale of getting my mojo back by way of the iPhone app store.

Stay tuned for the next thrilling chapter! Part 1: Desperately Seeking Ka-Ching

Footnotes

[1] So You Want To Be A Consultant?


  1. Prologue
  2. Part 1: Desperately Seeking Ka-Ching
  3. Part 2: Opportunity Always Ring-Tones Twice
  4. Part 3: Cost Control
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