Notes on interaction design & development. Get the Feed.
By Christoph Ono, builder at GBKS, and tweetable at @GBKS.

Worth Less than a Cup of Coffee

9/19/17App Store

Lots of discussion around app pricing right now. What most don't cover are the economies of scale that developers can tap into. Yes, the price for one app download may be $0.99. But there are no manufacturing or distribution costs, very little support needed, and the product is instantly available to hundreds of millions of people. A cup of coffee, in comparison, can be sold exactly once, and only to a customer that walks through the door in a particular location at a specific time. Additional costs are store rent, barista salary, coffee beans, plastic cups, sugar, etc. None of these apply to apps. Most of the really complicated stuff is taken care of by Apple and Google's incredibly sophisticated machinery so developers and customers can purely focus on cat photos.

The Sparrow Problem

9/19/17App Store

The age of selling software to users at a fixed, one-time price is coming to an end. It’s just not sustainable at the absurdly low prices users have come to expect. Sure, independent developers may scrap it out one app at a time, and some may even do quite well and be the exception to the rule, but I don’t think Sparrow would have sold-out if the team — and their investors — believed they could build a substantially profitable company on their own. The gold rush is well and truly over.

Ok, so the market matures. Just because the gold rush if over, that doesn't mean selling software at fixed price is over. It just depends on the product. A photo app doesn't require any upkeep, while an RSS reader requires a server that needs to be maintained. Cross-platform apps require even more upkeep, and B2B apps need proper support and service to back up the technical side. And many crappy apps simply aren't worth anything. Especially looking at Google Play, there are lots of solo developers with 100+ apps. Those are likely not very good apps worth paying for, in the same way that nobody will pay for a website I throw together in a few hours. It's a complex market that's slowly maturing, and I don't think it's economy can be summarized in a simple statement like "the gold rush is over". Thinking about Warren Buffet's "be greedy when others are fearful", maybe this is just the right time to build something?