Bloodbath in Store
App Store and Play Store are the graveyards for apps
App Store and Play Store as two powerful distribution platforms that can help your app reach millions but nobody notice that it's also a place where most of the apps come to die. Early on I was fortunate enough to work with a growing B2C startup and see first hand how a company with not enough leverage is smothered and eventually die a slow death. The experience taught me how brutal it is to build a B2C business and nuances that underlies in the world of building a highly scalable and profitable business in the cluttering world of apps. I will try to quantify my learning as much as I can and stick to just a few instead of writing an entire manuscript on it.
B2C is a straight up gamble. Either it works or you iterate it enough times to make it work. Weekly iterations are hard when you have limited bandwidth of people and time, and yet it is paramount to build a close loop feedback mechanism with early adopters to iterate and build a compelling product that people would want to use it and pay for. The light at the end of iteration tunnel is the Product-Market Fit (P/M Fit).
This is a rough account of what it was like to work with a team that almost pulled it off. The pandemonium on the floor of a company that is trying to make a cut in a crowded app business is hysterical. And it amplifies to third degree of chaos when the app is under a category that is getting saturated day by day. This (traumatic) experience taught me to look deeply into how a business fundamentally operates and how it is monetizes the opportunity. I should make it clear, this post serves as a quasi indicator of how market will look like going into the future.
Only aim in consumer app space if you have a strong differentiator in place or if you can manage to carve out a new market for yourself. Anything else is an uphill battle
I worked with a startup that pivoted massively from an e-Commerce business to News and Entertainment App business. Soon after the pivot I learned, high iteration rate is the key to build a mass usable product. A dedicated team is a prerequisite if you’re venturing into this space. A team that can turn those tight loop of user feedback iterations to features in a week and those iterations to a fully functioning product in a month or so. Fun Fact: 3 Redbulls a day can keep you going for straight 40+ hours. It makes you high functioning but pulls back on the productivity. Will not recommend, but desperate times of early days calls for highly caffeinated measures.
The Ruined Dream
Pivots are hard especially in an industry you know nothing about. Take time to learn as much as you can about the industry you’re venturing in. While building the roadmap for our product we naively hoped we will absolutely grow like Snapchat or something close to them. Just to put our delusions into perspective, Snapchat was doing 105M+ daily active users (DAU) at that point of time. Going forward we realized we were wrong. In fact, the margin of error in our judgement was wider than the losses Snapchat was making at that point of time. We promoted and tried to spread word to mouth and few people close to us started using the product. That gave us a fallacy of success. If these people are using our product, everyone else will also use it. But dice never rolled in our favour. This is the stage where panic starts to seep in slowly and starts to make you paranoid about everything; the enthusiasm that was hitting its peak crescendo some weeks ago was now a pit of darkness.
Firing All Cylinders
We studied and laid out some ground rules to get more users on the app and increase engagement on the app. We made downloads as our key metric, it should be a good indicator of how well we are doing in the market. We learned the hard way that downloads is never a good metric to lean on when you are pre-P/M Fit. It’ll take us another month before we correct this mistake.
While the product was struggling to penetrate the market beyond a couple of hundred users, we decided to turn towards some other routes. What do you do when organic marketing and advertisement doesn’t move the needle on your metric? I can tell you the answer is not inorganic marketing and paid user on-boarding. While we were desperately trying clinch on to any fiber of hope that could pull us up we started looking for companies that can help us boost our metric. After looking at a bunch of services we finally picked one. CPI looked good and we went ahead with them.
From the next day we started to see an acceleration in the downloads. I remember we opened a bottle of Moet & Chandon Rose Imperial when we hit 10K. In hindsight, I think that celebration had the most superficial meaning behind it.
Wait… This Isn’t Going Right
Next day, we realized that the dashboard was telling a different story. Buckle up boys, this is going to be a doozy one. All of our other metrics were poles apart from downloads, which is a decorative way of saying our DAU was abysmal and in app time might as well be 0. Why isn’t there any engagement with all of these downloads? Research revealed a twisted story; the company that brought us downloads was primarily asking school and college kids to download the app. This is how they got us those numbers but the students would download the app, get payment (amount company gives per download) and immediately delete it. As a result, most of the downloads were not even counted by the Play Store and even if they were, there was no engagement to them.
Oh, No! Is It Too Late?
For next 3 days we shifted our priorities and drifted away from the paid downloads model to something else. We went back to drawing board and reset out metric. Learning — Always know what do you want before you invest any resource into it. Paid model works if you want to just track downloads and as we saw, downloads is a vanity metric in the world of apps.
Over next 1 month we sat and built channels to pull engaging downloads. From organising a radio quiz competition to partnering up with a web comic to talk to the most influential video production media house to book a stall in Comic Con. We did it all and it introduced me to a new business dimension of B2C. The road to get any engagement on your product is a treacherous one. To everyone who is thinking to delve into this swamp of a business, I’ll advice you to spend sometime in learning the nuances of how to build an app business. A certain experience in this field will do you so much good.
We Are Definitely Partying
Frugality was never our strongest virtue. Instead of celebrating on big releases, we started to celebrate every little feature we shipped. This resulted in us spending more money than we were making (We weren’t making any money). We realized our unnecessary expenditure was skyrocketing but the impression was, "We'll raise more bro.” We weren't able to raise more.
Where We Were At?
With all the chaos and unorganized structure we managed to find or come close to P/M Fit. Before we could double down on what was working… the company was about to run out of money. On top of that, it turned out, content monetization is quite hard. Add the complexity of battling for traction in a saturated market where the biggest competitor was about to hit 100M downloads. To add salt to the wound, some companies in the similar domain were getting funded left and right with bigger and bigger cheque size. Everything fell apart in the matter of days. 75% of the team was let go in order to preserve some cash in the bank, only content and designing team was kept to churn out content everyday. I wasn't the part of content team. The company folded within a month.
Takeaways
It’s already quite hard to get a good DAU/MAU on your app but most of the times people forget that you are not just competing for user retention, but you are also competing for your app to get a screen space on the user’s phone; own a part of their screen estate.
Facebook & Google are already commanding 4-5 screen estate each on an average user’s phone. How likely are they to keep your app on their phone when there are already 12–15 apps taking up their valuable screen space and memory (Not everyone owns latest Android or iPhones. Heavy apps takes a toll on phone's performance, hence people with older handsets prefer to keep apps of most value to them on their phone)?
You are not just competing with your competitors, you’re also competing with the platforms that ironically are also your biggest distributors.
In closing, I'd say choose wisely.
TL;DR
Organic growth is getting harder
Distributing platforms are becoming competitors
Paid acquisition channels are getting expensive
Available acquisition channels are getting saturated
Preserve cash. Landscape will get dirty really soon
Fanatically find niche ways to grow before everyone else finds it
