“I could make decent money from an iPhone app that will be in the App Store, available to MILLIONS of iPhone users worldwide? and…without programming it myself??”

I saw the potential right away and because I took immediate action on it (albeit clumsily at times), my apps continue to reward me today. However, not everyone will have as bull-headed of an approach as I did. Many people I talk to have a lot of questions about initial investment, app planning, outsourcing, and how risky it really is to launch an app.

Well, I’m here to tell you the risk can be very small.

In this blog post we’ll talk about two ways you can eliminate most of the risk associated with creating an iPhone app via outsourcing:

Simple ideas can take you a long way!

1. K.I.S.S. Your App
(Keep It Simple, Stupid)

The most profitable apps of mine are also two of the simplest:

iLullaby for FREE is filled with free music that allows parents to put their kids to sleep easier. Within seconds opening the app, parents can play soothing music. It’s light, lean, and filled with professionally produced music. This is the app that earned most of my $18,000+ revenue spike back in Nov/Dec 2011 – more on that below!

DJ Sampler for FREE is a simple tool that allows DJ’s to playback sounds by tapping buttons on their device screen. The paid version of this app makes more money than the free version, but I’m showing you the free version so you can get the gist without having to fork over any dollars.

And last of the examples: My buddies over at Free The Apps! created virtually all of their apps using the K.I.S.S principle. I also came up with my ideation process by analyzing their apps carefully – The FTA guys made apps built for a certain function, and for the most part, they executed extremely well. Their work has paid off, and has translated to a huge, consistent $800,000 per year income for them.

The owner of this very blog you’re reading, Benny Hsu, pulled in $15,548 in a single week after coming up with a useful, simple idea and getting featured in the App Store for his efforts. Not bad!

Bottom Line: The average user won’t take your app as seriously as you do. Don’t pack it with elaborate features unless they’re part of the PRIMARY use of your app.

The simpler, more user-focused that your app is means the lower your risk and investment become.

Features are like Children

Be wise about how many 'feature' requests you make!

This point is short, sweet, and maybe a tad redundant to what we talked about in the last section. I always recommend to keep app ideas simple in nature, and do not bombard it with features. At the very least, try to plan for a way to hide the complexities of your idea – for example, I can tell you that Draw Something’s ability to record drawing sessions is incredibly difficult yet the user doesn’t ever feel that complexity. The app is robust, and runs like butter.

If your app is meant to take retro-looking photos, then focus on that functionality first and foremost. Too many times do I see developers and entrepreneurs trying to inject Instagram-like features,  log-in requirements, and countless social media sharing options. Those features may be important, so I’m not saying to ignore them.

What I am saying is that each feature you choose to add is like planning a child of yours. You have to think about it carefully, make sure it’s implemented properly (care for it ), test it over and over (active parenting ), and then test again before you send the final version off to the App Store (prep before college ).

Bottom Line: Choose wisely about how many kids (features) you want to have in your app. Too many kids means you’re making parenthood more difficult for yourself.

Choose features for your app wisely and that will mean less headaches, more money in your pocket, and as a result: less risk of an app thats too confusing for the end user.

2. Be Resourceful

This one area has saved my butt countless times.

Outsourcing development to experts around the world is efficient, smart, and…well, being resourceful. With outsourcing does include investment & a very careful thought process. This is especially true with your first app project.

Resourceful funding: The ultimate risk minimizer.

Being Resourceful: How I Significantly Lowered Development Cost

In this section we’ll talk about how you can be resourceful – thus, lowering your investment on app development. I’ll be referring to Elance quite a bit here out of personal experience, but will finish up with the key point/advice you’ll want to leave with.

To help counter development costs, I started up a very small design firm on Elance with my good friend Ryan who loves digital design. We design graphics for iPhone developers all around the world. Ryan is the designer, so he takes most of the earnings (and is able to live solely off of that income due to our positive growth!), and I always reinvest my share into the apps.

Example: Last winter we completed a design project where I was able to earn $700 and put that entirely towards development of iStrips, which cost us $800. This happened as I continued to live off of my app revenue & a consulting job I had.

Therefore, total investment to develop that app was $100.

Here’s the key takeaway: Ryan and I have always been into graphic/digital design, so here’s what we thought,

What if we paid for much (if not all) of future development with our skills instead of our money?

Elance is a fantastic way to leverage your skills and turn them into a quick, easy profit. You don’t need a website to launch your business, or a fancy resume’.

What skills do you have that you could share with the world in return for a few dollars?

Perhaps you’re a good illustrator? A good graphic designer? Maybe a good audio composer? Know how to write legal copy? Are you good in copywriting in general? Can you design or code websites?

I’ll tell you right now that that all of these things are in demand on Elance!

Succeeding on Elance takes three things:

1. Being good at something
2. Being able to show that you’re good
3. Excellent customer service

That’s all – I promise.  I’d recommend heading over to Elance.com, and browsing the various job postings that are related to one of your talents.

Now, here’s the key:  Being resourceful does not mean you need to look for freelancing opportunities. But I’d love for you to try being creative in making quick, easy money for yourself to offset your investment.

Heck, I even know a millionaire who sold off his old t-shirts to fund his startup business. I love stories like that.

There’s a ton of potential and opportunity in this industry that you shouldn’t miss out on – and if you can profit off of the opportunity (all while creating a product you love!) with minimal investment then it’s a win-win isn’t it?

What are ways you could generate money to help save costs? What skills do you have that you could outsource to the world? Elance is just one of the ways you could leverage your own skills and talents in exchange for side income. Fund yourself and if your app kicks butt you’ll be thanking yourself over and over!

–

And that’s it folks! A lot of food for thought in this post to mull over.

I really do believe that the app industry is in a zygote-like age. It’s incredibly young and thriving – thus, my advice to you is to get excited about the ideas in your head! The strategies above have helped me build an app library that consistently earns $100-$500/day , or $3500-$9000 per month for me depending on advertising seasons, spikes in sales, etc. The numbers aren’t astronomical by any means, but they’ve allowed me to work on all of my businesses full-time, enjoy a wonderful work-life balance, and spend more time with my family – and I’m just getting started.

If you’re looking for a passive income stream, I urge you to take a look at creating an iPhone app. There continues to be massive potential for profits in this app world and yes, the opportunity is very real. However, like any legitimate business or investment there are risks BUT, my hope is that you’re now equipped to minimize them.

Go get ‘em Tiger!

Ready to take Action?

• Grab my free eBook by signing up for my free newsletter (look below!) to learn more ways you can minimize risk. The eBook is also a complete how-to on starting an app business!
• Still trying to think of app ideas?  Here’s a guide on brainstorming app ideas.
• Inspired to learn more? I highly recommend this book: How To Create iPhone Apps with NO Programming Experience
• Want me to help you build a profitable app? Let me know how I could help!
• Have a question? Ask me, or post a comment below!

In part 2 of my “app cost” blog post we’ll look at the first 3 apps I created via outsourcing. I’ll be revealing exactly how much I invested to have the apps produced, what work was done, how much each app is earning today, and…sigh…the mistakes I made that you should learn from.

(If you haven’t read part 1 yet, feel free to catch up here. I cover all the factors that can affect development cost, as well as ways to minimize those costs.)

After reading this blog post you’ll see how a complete, utter newbie can jump into the industry and stumble his way to success. Coincidentally though, after reading this you’ll be equipped to not overspend, overthink, and get overzealous about things like I did.

Let’s start with the app that’s earned me the most consistent earnings thus far:

DJ Sampler

Investment: $1,150

Purpose: A tool for DJs to output audio samples from their iPhone/iPad
Currently Earning: $25-80/day (Ad Revenue, App Sales)

Summary: My trust workhorse app. The full version of this app is consistently purchased 10-50 times every single day ($14-$70), while ad revenue from the free version earns anywhere from $2-$15/day. This app is an excellent example of how you can make yourself the target market for your app. Before creating this app I had whined about the lack of sampler apps in the App Store – soon after, I started my own app business and before I knew it, the product I always wanted was in my hands.

This app has been the most predictable in terms of revenue, but not necessarily the highest earning. That leads us to the next app…

iLullaby for FREE

Investment: $750
Purpose: Professionally produced lullaby audio to help parents put their children to bed.
Currently Earning: $50-$450/day (Ad Revenue, In-App Purchases)

Summary: My breadwinner. This was an app that I thought of very casually, and without big expectations for. If you’ve read my post about keeping app ideas simple, this app is the perfect example of that. This app was also an eye-opener in that the indie app game is truly unpredictable – sometimes the ideas you are excited about won’t always work out, but the ideas that others are excited about ALWAYS work out. The key takeaway & reason for success in this app is that it’s got a very loyal audience of parents who want to use the app over and over to put their children to sleep.

iLullaby makes money in my sleep, because others sleep… how cool is that?

iBobbleheads for FREE

Investment: $1,600
Purpose: Fun app to create a bobblehead out of anything using photos.
Currently Earning: $0.01-$0.15/day (Ad Revenue)

Summary: A hilarious fail (seriously, the app is actually funny to use…yet it fails). And, it just had to be the one app that cost me the biggest investment in my first batch of apps. The app was loved by 90% of the people I handed it to. It’s charming. It’s simple. It’s fun for the most part.

Thus, I’m not 100% sure on why it’s never really earned decent money, but my guess would be that it’s somewhat clumsy in execution, it doesn’t draw repetitive use, and it’s just not polished enough. Unfortunately, this is one of those app ideas that had excellent intention, but “meh” execution. The idea could probably do well, but it’d take much more work than what’s currently done. Lastly, I think the app could certainly do better as a paid app, but it’d probably hurt my brand more by having people fork over dollars for the app in it’s current state.

Here’s what you should take away from iBobbleheads: Keep risk small by keeping ideas small, and don’t take on an idea unless you can a) execute the best and b) afford the investment to do so.

Initial Project Cost = $3,500
Feature Additions during Development = $990
Total Investment for 3 Apps = $4,490

 In Closing

First things first – whether the $4,490 looks like a HUGE amount to put forward in a business or very little, I want you to know this investment should not be used as a guideline for how much you will need to spend. There are tons of factors that can affect development cost, thus it’s a really dynamic area of appreneuring.

The good news is that I’ve made that $4,490 investment back over and over… and over again. Today, I continue to make that investment back with very, very little upkeep and that’s the beauty of this game. Hopefully with everything I’ve written about here you’ll be able to approach your business smarter, faster and with more insight than I had when I started.

If you have any comments, questions, or curiosities feel free to post a comment below! I’d love to hear your thoughts, and will respond to you.

Ready to take Action?

• Download the apps I’ve mentioned in this post. Try to think about why each app succeeds or fails and apply those learnings to your own app idea.
• Still trying to think of ideas?  Here’s a guide on brainstorming app ideas.
• Inspired to learn more? I highly recommend this book: How To Create iPhone Apps with NO Programming Experience
• Want me to help you build a profitable app? Let me know how I could help!
• Have a question? Ask me, or post a comment below!

Note: I’ve included links to my apps in this blog post, however, all of the apps are free, meaning it won’t cost you anything to check them out. I may (depending on ad campaigns running) make a cent or two if/when you open the apps up on your device, and this is due to ads that are embedded in the apps. DJ Sampler also offers a ‘full’ version of itself that is $1.99 (don’t purchase it unless it can actually be a helpful tool for you).

The goal of linking my own apps is to allow you to scour through them, see how they work, and learn from them - not to make money or promote them. The motivation of linking the apps is context based not monetary based. Cool? Cool.

An app can cost anywhere from $100 to $100,000 depending on what your idea looks like from the ground up.

Let’s start off with the biggest factor:

Choose a developer carefully - You won't regret it!

Your Developer

Alright, seriously, this is a topic I could talk about for days. But because we’re not sitting in front of eachother feeling a little tipsy (that’s the only way you’d endure me it, believe me) I’ll try to keep things as potent as possible here.

The biggest factors that will affect your development cost are, along with a self-assessed percentage of how much that factor affects development cost:

• Experience (20%)
  How long has the company been working in the industry? The longer your developer has been creating iPhone apps for, the more likely that they’ll charge a bit more than their competitors. Well experienced developers/development teams want to work with profitable (bigger), challenging ideas that will have them written about one day. Less experienced teams may charge less, but the tradeoff is that their margin for error  & challenge will be larger.
• Skillsets (20%)
  What services does the company offer your project? Some companies will offer everything from graphic design, to development, to thorough QA (Quality Assurance/Tester). Other companies want to handle development, and that’s it. In my experience, the more skills a development company offers, the more they will charge for a project, even if you aren’t taking on all of those aforementioned services. More on this below.
• Team Size (20%)
  Almost all development companies will offer you a multi-manned team to work on your project. They’ll offer you a project manager/first-point-of-contact of sorts, developer(s), graphic designer (if necessary), and possibly a QA worker. Rarely have I ever had just one person work on my project unless it was a direct contact/colleague of mine. Typically, the larger the team working on your project, the higher costs can become.
• Relevant Experience (40%)
  The single biggest cost-impacting factor in all of my experience, is whether or not your developer has worked with your idea before. Example: When searching around for quotes to have iStrips developed, I got proposals from $800 all the way up to $4000. An insane range. On the low end were developers who were able to make the app in their sleep, while the high end cost developers likely saw the project as a nightmare.Bottom line, find a developer who has extensive experience with your idea. This is a great way to offset the ‘Experience’ factor above. In other words, try your best to find a developer that thinks your project is easy.

Features

Be aware of feature-happy tendencies!

How many bells & whistles will your app have?

Will it be an app that lets you take great, nostalgic-looking photos?

Or will it be an app that lets you take great, nostalgic-looking photos in a social media community, with options to edit those photos in a Photoshop type environment, then upload to a contest format where a random winner is sent to Hawaii where the app instinctively orders you a lobster dinner immediately upon arrival? Pardon the ridiculous example.

Bottom line is, every single feature you implement in your app will up your cost. This why I preach over and over to app outsourcing newbies to K.I.S.S. (Keep It Simple Stupid!). Because it’s incredibly fulfilling and fun to create an app, it’s very easy to get feature happy. Keep your app’s primary use/function in mind, and don’t add much fluff to your idea unless it’s absolutely critical.

Want more advice on what features you should/shouldn’t include? I highly recommend you pick up this book:

REWORK: A Business Book from 37Signals (Creators of Basecamp)

Connectivity

How will your app interact with social media networks?

Will it simply allow someone to share the app via Facebook? Or do you want your app to record audio, then mix that audio with video, then post that video to Facebook? One of my app’s does the latter, and trust me it was a headache.

Take the popular Draw Something app for example. They could’ve simply had you guess your friend’s drawing, but because it records your entire drawing process, then displays that recording to your friend, is a HUGE accomplishment. My instinct says that process is pretty difficult to create, thus, your takeaway lesson is that the more connectivity & shareability your app has, the higher development cost will be.

Be aware of the little details that can affect development & investment!

Details: Buttons, Animations, Sound, Interface

Ever hear the saying that “it’s the little things that get us.” ? Well, that rings very true in app development cost. Do you want all of your buttons to maintain the same look when they’re displayed and tapped? Or do you want them to look like they’re depressed every time they’re tapped? Well, a simple decision would trigger an action list that looks like this:

1. What colour do you want your buttons to be?
2. Do you want your buttons to be 3D or flat?
3. Who will be designing the buttons? If a designer you’re hiring will do it, take this into account for their service costs.

Compatibility

A fairly simple factor here. Will your app be compatible with iPhone? Or iPhone & Android? Perhaps iPhone & iPad?

The biggest thing that will up your cost is cross-platform compatibility (iPhone/iOS to Android). Android runs on a completely different platform than iOS, and there are many more phones on Android than iOS (ahem, 1 phone), so things can get pricey quickly. This is the reason I stuck with iOS – it’s the most robust platform (IMO), and the one I know best.

Any iPhone app you create will be compatible with the iPod Touch, but there’s also an option to make your app compatible with iPads. Doing so means your developer & UI designer will need to create a separate instance for the iPad version – this ups cost. Also keep in mind that adding an iPad version increases the file size of your app, meaning it will take slightly longer for users to download.

Keep in mind that any apps over 20MB in size cannot be downloaded via cell network signals – ONLY via Wi-Fi.

My recommendation would be to create an iPad version of your app if it’s absolutely necessary, practical, and within your budget. Talk to people who are interested in your app idea to determine if an iPad version is ideal, then go from there.

For my DJ Sampler app, I knew it was necessary to create an iPad version because DJ’s would be using the app at live dancing/musical events – the nature of the app is to play sounds from your device by tapping buttons, meaning a larger interface (a la the iPad) would be very user friendly.

Conclusion

There you have it! A handful of factors that will impact your app’s development. I know that some of these things can come across as intimidating but rest assured you won’t need to spend as much as you think if you keep your app tight & simple.

In the 2nd part of this post I’ll be showcasing the apps in my library, how much I paid to have them developed, and lessons you can take from each project to ensure you minimize your own development cost/investment.

Part 2: How Much Did I Spend? [coming soon!]

Til then! Cheers and all the best!

Billy B.

Ready to take Action?

• Head over to Elance, and browse job postings. See if you can find a job posting that’s similar to your app idea – note the proposal amounts.
• Consider grabbing this book if you’re ready to learn the full front-to-back process of making your own app: How To Create iPhone Apps with NO Programming Experience
• Thinking about getting started? Here’s what you’ll need.
• Read about my method on developing apps.
• Have a question? Ask me, or post a comment below!

If you’re reading this post you’ve likely already thought of a few app ideas that you’d love to see on an iPhone sooner than later. In this blog post I’ll be sharing some techniques I use to not only dream up ideas, but to validate them.

For now, let’s start with the easy part:

Noodle carefully over your app idea. It'll pay off!

Brainstorm

1. Solve a Problem

Think about your daily activities – what tool do you wish you had?

How could you make a simple task (on your iPhone) even easier?

For the creative thinkers… is there a game concept from your childhood that you could pull inspiration from?

2. Would you use it?

Create an app that you’d personally use. Believe me, there’s a much better chance that you’ll put much more passion into the project than if you were to create an app that you think others would use.

Personal Example: As a hobbyist/part-time DJ, I created the DJ Sampler app because it was an iPad app I wished for. Instead of waiting for someone to make it, I did it myself when I launched my business. Now, I use the app at every single gig I work at and the app has consistently generated between $40-60/day for over a year.

3. Would you… keep using it?

Create an app that you’ll want to use over and over. Chances are, if you use your app that way, your audience will too. And that can only mean good things for you as you’ll have a loyal user base, and excellent potential for ad revenue should you decide on that monetization model.

Personal Example: When I created iLullaby for Free, I used the ad revenue monetization model because I knew people would be inclined to use it repetitively, i.e. every single night. That decision has paid off as that app is now my highest grossing app to-date.

Validate

1. Identify your Audience

Don’t try to create an app that’s for everybody.

He who tries to please everybody, pleases no one.

Identify exactly who your app is for. Try to think of an avatar for your audience: Is it a doctor who wants to keep his patient charts better organized? Is it a photograph enthusiast? Antique collector? Young entrepreneur that works in the cloud, and wants to be reminded in the morning about his appointments?

Tip:  No matter your choice, be as specific as possible!

2. Ask your Audience

Once you’ve identified exactly who your audience is, ask them for feedback. This applies even if you are the target audience. When I created iStrips, my photo booth app, I constantly asked my fiancee’ and photography enthusiast friends for feedback. Simply said, it’s easy to over-engineer apps when you’re excited about them, and feedback from your audience can help keep you on the right path.

Tip: Use your audience to test your app. When I created iLullaby, I handed my iPod Touch over to a young couple at a local Starbucks and asked them to try out the app. I didn’t tell them what to do, but instead paid careful attention to where they got lost in the app, what their tendencies were, and asked for honest feedback after they were done playing with it.

3. Competition – How will you stand out?

Scour the App Store and find out exactly who your competition is. When you find them, do not try to replicate what they did but instead think immediately about how you can differentiate yourself from them.

It’s OK to create an app that already exists. The challenge is in implementing the right amount of features for your audience, and injecting a unique personality and brand into it. Also, if your app idea exists already it’s not too late – in fact, it’s validation that there’s a market for your idea and people are making money off of it. Find a way to stand out.

Tip: If your app idea doesn’t exist, consider that a double edged sword. You may be the first to the App Store with the idea but you’ll want to do even more research into your audience, and realistic demand for your idea before running with it.

4. Monetization

How are you going to make money? Will it be free? $0.99? $1.99?

Consider that if you’ll be moving forward with a paid app, you’ll need to put more upfront effort into promoting it. Free apps are great for making money as well (ad revenue), but you’ll need to make sure your app is sticky enough for people to use it repeatedly.

Tip: Check out my post about app monetization for more info on this!

Ready to take Action?

• List a few app ideas, find your audience (online or offline) and ask them directly for feedback
• Want me to help you build a profitable app? Let me know how I could help!
• Want a guide that walks you through app ideation, development, and marketing? I recommend that you read this book: How To Create iPhone Apps with NO Programming Experience
• Read about the different ways you can make money from apps
• Read about my method on developing apps
• Have a question? Ask me, or post a comment below!

Appreneur: An independent mobile application developer who creates a passive income for him/herself without necessarily knowing ANYTHING about programming.

In this post I’ll be sharing the list of things you will need before becoming a certified appreneur. You’ve got the brains, you’ve got the ambition, and maybe you even have a killer idea that is ready to take the App Store on by storm.

Well, first things first:

1. Get an iPhone or iPod Touch… and an iPad (if you can)

This should go without saying – but, if you’re going to run your own iPhone/iPad app business you’d better be equipped to test your

Yes, you can run an iPhone App business...without an iPhone!

own product! Now, if you’re intimidated by the cost of an iPhone these days, not to worry – you can grab an iPod touch for far less than an iPhone without sacrificing critical elements.

Most apps will perform on an iPod almost exactly the same way they will on an iPhone, except for Photography related apps. However, that doesn’t mean you can’t use an iPod for testing if you’re planning to release a Photography-based app – the iPhone’s camera is better than the iPod’s so the quality of your test photos won’t be as good as they would be on an iPhone.

An iPad is also a highly recommended investment for those of you looking to create an iPad version of your app. I’d also recommend grabbing one even if you’re not planning on an iPad version.

iPhone apps can also be installed on iPad devices, so the more devices you have to test on, the better.

Bottom Line: At bare minimum, start off with a new-as-possible iPod Touch (4th Generation or newer), and an iPad if you’re planning on releasing an iPad version of your app. You can find used iPod 4th Generation and iPad devices on Craigslist, Kijiji & Ebay at great prices if you’re on a budget.

And don’t stress too much about getting an iPhone – I used Blackberry/Android phones for the first 1 and a half years of running my app business before finally getting an iPhone.

2. Get an Apple Developer Account

Apple Developer Account: Your road to the App Store!

It’s a $99/year investment to be an official ‘Developer’ in the App Store – An extremely low cost if you think about the potential of getting your app out to millions of Apple users around the world.

Signing up for a Developer account was one of the smoothest processes of starting my business. I submitted my application, and in less than 24 hours, was approved for a Developer account. However, there are two ‘levels’ of developer accounts: Business and Personal.

Signing up for a ‘Personal‘ account means your legal first & last name are shown in the App Store.  This also means that any legal issues your app has will be attributed to you personally, and not to your business. However that simply won’t happen unless you outright steal someone’s material, violate a trademark, etc.  It’s never been an issue for me.

Signing up for a ‘Business‘ account means that your business name appears in the App Store. This gives your app company a more professional appearance, and leaves your personal info ‘behind the curtain’ so to speak. The application process for a Business account takes considerably longer, as you’ll need to provide various paperwork to prove your business’ registration and legal existence.

3. [Optional] An Apple Computer

My Macbook Pro: The best investment I've made into my business...hands down!

Grab a Macbook, Mac Mini, or even that brand spankin’ new 27″ iMac if you can afford it. However, because of the outsourcing strategy we’ll be using to developer our apps, owning an Apple computer is not required - though I do recommend it if you’re able to invest in one.

If you don’t want to invest in a Mac when you get started, don’t worry about it - it’s not a showstopper. You’ll still be able to test your app(s) on your iPhone/iPod/iPad device. As your app is being produced, your developer will likely issue you files & instructions on how to install your test app on your device – and if they don’t, ask them for guidance.

For those of you able and willing to invest into a Mac, the benefits are:

• You’ll be able to test apps right on your computer (although I always recommend testing on your mobile device as well)

• You’ll have access to your app’s source code – meaning you can make simple changes if you’re the techy type, and comfortable with feeling your way around a software developer kit (SDK).

When buying your Apple computer, aim for a used 13″ Macbook. It’s the simplest Mac you can get, and the cheapest. Look on sites like eBay, Kijiji and/or Craigslist to find local sellers & deals.

When you find someone selling a Mac, you’ll want to do your due diligence on the seller and the product itself. For example, when I bought my first Macbook, I found a local college student who was looking to sell her Macbook quickly. I snagged it for a mere $550, which at the time was a great deal considering it was only 1 year old . There are likely to be similar deals in your area!

I met the seller at a local Starbucks, asked her to open up the Macbook where I then looked through everything, tested everything, and made sure no corrupt data was on the computer. If you’re not technically confident in doing all that, then I’d recommend bringing a friend or family member that is technically savvy.

Just remember, the Mac/Macbook you buy will be your mobile office – choose wisely and carefully!

4. Separate Business from Personal

We won’t spend too much time in this area as, depending on where you live, business laws will differ.

Separate Biz from Personal: You (and your accountant) won't regret it!

My advice here is short and sweet:

• Register a business with your local government – work with your local authorities to determine which option will be best for you (solo proprietorship, LLC, partnership, etc.)
• Open a business bank account
• Use this account to separate all your business expenses and payments from your personal activity
• Set up a PO Box (Optional, but recommended)
• I personally recommend using a UPS PO Box for all business-related mail & paycheques. This keeps all business mail separate from personal, and also gives your business a professional address for any account/payment/registration purposes.
• Head on down to your local Post Office/UPS and inquire about PO Box options.

The eBook that changed my life!

That’s it! Once you’ve got all of these items in place, you’ll be structurally set to start earning from your very first app. I’m currently working on writing a full post about App Planning but if you can’t wait that long I’d highly recommend checking out the ‘How to Create iPhone Applications with NO Programming Experience‘ e-book.

That eBook is the very first book I read when I got started in the industry, and is filled with detailed, front-to-back information on everything listed here as well as App Marketing, Outsourcing, Planning and much more. HIGHLY recommended.

You can also check out the interview I had with the authors of that book here: How 2 Guys Make BIG Money ($800K+ per Year) From iPhone Apps

Ready to take Action?

• Read the ultimate guide on creating, outsourcing, and making money from apps
• Read about the different ways you can make money from apps
• Read about my method on developing apps
• Have a question? Ask me, or post a comment below!

Cheers!

Billy B.

All I knew is that I wanted to start a profitable business of my own. 

I stumbled across an e-book written by two guys from California who struck it big time, making over $800,000 in a single year from app revenue. Simply mindblowing!

Soon after, I decided I needed to take action and buy their book. I had to find out their secret method of doing things. That action turned out to be the best decision I ever made because it prompted me to launch my very own app company, and eventually make enough money to support myself without needing a full-time job.

And now,  I’m extremely pumped to share a brief interview I conducted with Mike & Quoc, the authors of that e-Book and original founders of the company, Free the Apps. Here’s what they had to share:

Billy: Can you share some of your story? What thoughts were going through your head before and after you pulled the trigger on an app business?

Michael Moon & Quoc Bui, Founders of Free the Apps

In the summer of 2009, we were hanging out and talking about the insane amount of revenue indie developers were generating through the Apple iTunes App Store. Being tech-geeks who love the latest technology, we talked about how cool it would be to release our own app in the App Store. The thought of creating an app and making it available for the world to use was enough to get us started. Making a few bucks off it was merely an afterthought, let alone creating a real life-changing business out of it. We got really excited to make it happen, but realized that we didn’t have any iPhone app programming experience. So instead of spending months learning Objective C to develop apps ourselves, we did what any efficient entrepreneurs would do, we hired someone to build it for us! The idea to outsource our business was the single smartest decision we made.

Billy: Your website says that you guys have gotten around 30,000,000 downloads! What revenue numbers has 30 million+ downloads amounted to in terms of revenue?

We recently passed the 40 million download mark and have seen an average of $70k/month for the past couple years.

Billy: 40 Million! Man, that’s one gigantic following. Now, can a regular guy with a 9-5 job really have enough time to start up an app business? Don’t you need tons of startup capital, a big team, etc..?

If you would have asked us back in 2009, we would have thought it was impossible. Since then, we’ve created a company with only the 2 of us using the many tools that are out there such as Elance and Odesk to outsource all aspects of our business. It made it possible manage a lot of great talent overseas to create our apps that you see today. We’ve quit our jobs and sold Free the Apps to public company Bitzio Inc in late 2011.

Billy: How have apps changed your lives? What life experiences, and lifestyle changes have you enjoyed due to the passive income?

We got the one thing that money can’t buy. Time. Quoc lived abroad for the greater part of 2011 visiting numerous countries and volunteering at various non-profit organizations. I finally had the financial freedom to quit my day job and visit Quoc on my travels. Both of us got to spend more time doing the things we enjoy with the people we care about.

Billy: Control over your time, and financial independence is definitely priceless! Any other thoughts you’d like to share?

Everyone always asks us if it’s too late to get into the app space. No, it’s not. We’re still making apps everyday. The app space is even bigger and better than when we got started in 2009. Draw Something was acquired by Zynga this year for around $200 million and was making around $100,000 a day. Instagram was just acquired by Facebook for $1 BILLION! To put things into perspective, Flickr was acquired by Yahoo for only $35 million in 2005…a lot less than $1 billion right? This is the time to be in the app space.

Billy: I have to agree! I have to think that there’s plenty of pie to go around in the app space – I also think it’s important to note that we don’t need to create the next Draw Something or Instagram to succeed either. My highest grossing app, iLullaby for Free, isn’t even a Top 100 app! 

Quoc, Mike – thanks so much for making yourself for this brief interview. Your success inspired me to take action on my own app ideas and today, I’m able to live scot-free of a full time job. Instead, I can finally focus on helping others through this blog and building the app business even more. Cheers!

[End of Interview]

So, there  you have it. Words of wisdom and validation from two regular guys who worked smart, not hard. They saw an opportunity in the industry, grabbed it, and ran for the uprights!

The eBook that changed my life!

In other words, the hard work they put in a couple years ago is continuing to pay off for both Mike & Quoc, rewarding them both with the lifestyles they dreamed of.

The one perspective I have on Mike & Quoc is that obviously not everyone is going to cash in $800,000 from apps. However, they’ve definitely figured out a ‘formula’ of sorts and share it all in the ebook shown just to the right. The rest is up to you!

Ready to take Action?

• Read the ultimate guide on creating, outsourcing, and making money from apps - If you’re ready to start building towards a great side/backup income source I highly recommend starting with this book. Written by the two guys interviewed in this blog post.

• Have a question that wasn’t addressed in this interview? Got a question about the eBook or App Development in general? Post a comment below! I’ll be sure to read and respond ASAP.

If you’ve read my welcome message, you’ll see that app revenue can be a beautiful thing. You work diligently for a period of time, and get paid for it over and over. You get paid in your sleep. You get paid while you’re playing with the kids, out shopping with the wife/girlfriend, and even while … you’re in the washroom. That’s right.

Apps as a Side Income

You also continue to get paid if you have a job, which can be a great way to save up for that vacation you’ve always wanted. That car you’re eyeing, or maybe just to save up for a rainy day. It’s a fantastic side income if you love your job, and simply want a side venture that you can put passion and creativity into, without needing any programming experience.

I’ve met a few people who took on an app of their own simply because they wanted to solve a problem in their life, and make money from it (without the big ambition of wanting to quit their job) – and that’s the beauty of this game: Apps can be as small or big of a venture for you.

Or, maybe you want to create an app empire and eventually leave your job…Chad Mureta pulled off that kind of success, and so can you.

Apps as a Backup Plan

If you’re working a job you love, or working a job you hate, my advice to you is that apps can be an excellent backup plan. The world is faster than ever, with the revolving door at companies spinning at wild rates. Now, I’m no expert on today’s working landscape, but based on personal experiences, the news, stories from friends and my LinkedIn feed, it’s very easy to see that people are switching jobs, quitting, etc. more often.

When my working contract ended with the company I was working for from 2011-2012, it was bitter sweet. I had good relationships there, however at the same time my contributions reached mutually-agreed goals. I helped them get to where they needed to be (and beyond!), and were at a point where they could continue growing without my day-to-day support.

The point is that I was lucky enough to have been earning more revenue from my apps at the time, compared to my consulting pay. This means I was able to walk away from that company without much worry or stress – I wasn’t panicking about the next contract, job, or mortgage payment.

Thus, I couldn’t help but ask myself: What if I didn’t have the apps?

The answer is that I’d have definitely been scrambling for a new job or contract. But, thanks to my app portfolio, consistent & passive income was being made that would hold the fort until the next opportunity came along.

Bottom Line:

Whether you have a job, own a business already, or both, and simply want to make that app idea of yours come alive you should consider taking action on that passion. It’ll take diligence, thought, and patience, but I know you’ve got it in you to make a success out of it.

Ready to take Action?

• Read the ultimate guide on creating, outsourcing, and making money from apps - If you’re ready to start building towards a great side/backup income source I highly recommend starting with this book.
• Have a question? Ask me!
• Want me to help you build a profitable app? Let me know how I could help!

How would an extra $1000 per month change your lifestyle? How about an extra $2000? $5000?

Post your comments/thoughts below! I’d love to hear from you.

3 Monetization Models... Which will you choose?

Hey everyone, Billy here. In this blog post we’ll talk about the different ways you can begin making money from your very first app. This was a crucial decision point when I started building my apps, and is really one of the first decisions you should make as you begin planning your app. (However, it is possible to change your monetization model after the fact – more on that below)

The one thing to keep in mind when selecting a monetization model is that it should follow your app’s purpose, not lead it. Solve a problem and/or fulfill a practical need, then think how you’ll make money. One of the biggest mistakes I see developers make is that they create apps that are bluntly and clearly built to make money, instead of creating a genuinely fun or useful experience, then carefully deciding how to make money from that idea.

I’ll provide more elaboration on that point after we go through the 3 money-making models – for now let’s start with the most obvious way to make money from apps:

1. Paid Applications

The most straightforward model for making money off of apps. You create an app, and post it in the App Store for a given price (anywhere from $0.99 – $100+ USD). Apple then pays you via direct deposit, paper cheque, or other preference on a monthly basis.

Apple pays you 70% of all revenues generated, while they keep 30%. i.e. If your app generates $100, you’ll take home $70, and Apple collects $30 in return for listing you in the App Store (a “publisher” fee, if you will).

Pros

Get your app on this list!

• Straightforward payment
• The most reliable form of payment (Apple’s payment system is VERY robust – I’ve never  missed a payment)
• Change pricing at any time
• Excellent income potential if your app sells well, or is featured by Apple

Challenges

• Usually requires more pre-launch marketing
• More potential for tough competition, especially if the competition is free
• Paid apps are usually packed with more value – or are expected to be

Bottom Line: Paid apps have excellent potential for income, however you’ll definitely want to place more emphasis on how you market your app before it’s released. Build up as much hype as you can via email, Twitter, Facebook, and media publications (writing/publishing press releases pre-launch) and you’ll be in a great spot to succeed.

An awesome paid application success story for you to ponder:
Taking Control – An Incredible and Inspiring Success Story ($2,325.91 in a Day!) with Benny Hsu

2. Free Applications

Making money from free applications? But, how? Well, my friend, the answer is all around you.

Advertising.

That’s right. There are many, many platforms out there that you can implement into your app which enable advertisements to appear in your app as people use it.

Imagine creating an app that could earn you money every single time it’s opened. That’s the beauty of running ads in your app – you get paid based on how often your ads appear and/or get ‘clicked’ by users as opposed to a one-time cost of $0.99 or more with paid apps. However, it’s more complicated than it sounds – it can be tricky trying to create a great, free app that has advertisements in it.

Looks like a unicorn paid for my lunch today.

Pros

• Better initial exposure – Almost always get downloaded more than paid apps at launch.
• Potential to get paid every time your app is used as opposed to one-time cost.
• Eliminates competition of paid apps (initially) – people will usually try a free app before a paid one.

• Mobclix - The best, highest paying ad serving platform I’ve used (and I’ve tried a few). Their platform is built to automatically deliver the highest paying ad campaigns from dozens upon dozens of ad networks. HIGHLY recommended if you’re planning to use ads.

• Apple iAds - Apple’s ad network that delivers beautiful, rich media ads to your app. I highly recommend implementing iAds as they pay quite well, and in fact, you can integrate iAds into Mobclix’s platform.
• How to Create iPhone Apps with No Programming Experience –  The ultimate e-book on creating your very own iPhone app. The authors earned over $800,000 from their apps, many of which employ the ad monetization model. If you’re ready to get started I highly recommend this book.

3. Freemium Apps

This model is essentially a twist of the Free model mentioned above. ‘Freemium’ apps are completely free apps that encourage a user to take additional action during usage of that app, that results in revenue earned for the developer. These actions/purchases are called ‘In-App Purchases’.

Another example of a freemium model would be to have a ‘lite’ (free) version of your app that has limited features. For a fee, your users could upgrade to the full version that includes all features. Thus, the ‘lite’ version acts as a sort of ‘preview’ or ‘trial’ version. The trick here is to ensure the lite version is still useful and valuable to the user in it’s own right, so the user isn’t forced to grab the full/paid version in order to enjoy the core purpose of the app.

A couple examples:

• Draw Something – The incredible app that lets users play a version of Pictionary in a social atmosphere.
• Freemium Aspects:
• Users can buy additional word ‘bombs’ and ‘coins’ that unlock various features, and colours for drawing.
• Users are encouraged to purchase the $0.99 version that does not show advertisements to the user.
• Angry Birds - The best selling, addictive game where you fling angry birds at kleptomaniac pigs.
• Freemium Aspects:
• Users can play the game in full for free, with limited access to various levels. However, for a fee, they can unlock all of the levels.
• In some versions of Angry Birds, a ‘Mighty Eagle’ can be purchased for a fee which acts as a powerful weapon against your pig foes.
• DJ Sampler for FREE  - My app that allows DJs to play/output short audio samples at their events.
• Freemium Aspect:
• Users are encouraged to purchase the full version for $1.99 that does not include ads, and allows DJ’s to import their own sounds.

Pros

User upgrades... You profit!

• Excellent way to create multiple income sources from a single app.
• Having a ‘Lite’ version of your app is a great way to cross promote the ‘Full’ version.
• Potential to earn ad revenue from the ‘Lite’ version, and sales revenue from ‘Full’ version sales – all from a single app idea.

Cons

• Takes more thought, and careful planning.
• Trickier balance of app value vs. monetization method.
• Higher development cost for creating multiple versions (Lite/Full) of your app.

Bottom Line: A great way to make money in different areas from a single app idea. I created iLullaby for FREE with the objective of easing parents’ need to put their children to sleep every night. As the app started to generate decent ad revenue, I decided to add a ‘Lullaby Store’ that allows users to unlock new songs, cute background images, and/or remove ads permanently from the app for a cost.

Therefore, there are 4 ways I can generate income from this single app:  ad revenue, and via 3  in-app purchases that are priced at $1.99 each. However, the key point here is that the app still serves it’s purpose well even if the user chooses not to purchase any of those upgrades. Keep that in mind if you decide to go with a Freemium monetization model!

Lastly, should you decide to create a freemium app, just remember that you can always create a Free app to start, and integrate Freemium aspects into the app later on down the road if it does well. If you’re new to the app industry, this point stands especially strong.

Ready to take Action?

• Read the ultimate guide on creating, outsourcing, and making money from apps - This book covers monetization models as well as start-to-finish development guidance. Highly recommended if you’re ready to get started!
• Check out Mobclix – The aggregate ad network that I use for monetizing free apps
• Start thinking about which monetization model fits your app idea
• Have a question? Ask me!
• Want me to help you build a profitable app? Let me know how I could help!

 

When did you become a programmer?

or,

Isn’t it hard to develop apps? I didn’t know you could do that!

I’ll address both of these questions with the assistance of a childhood hero, The Rock, aka Dwayne Johnson:

It's true, Dwayne.

So here’s the secret strategy I employ, along with other appreneurs: I outsource development to experts overseas.

Why I Outsource

Imagine if you actually tried to learn how to program in Objective-C (the main programming language for iPhone apps) starting tomorrow…

If you’re really good, you might become adequate at it within 2 weeks or so. Even then, you’ll most likely only be good enough to create a basic app. And after that, you’re still left with figuring out how you’re going to get graphics designed for your app which is the other half of the battle: A pretty ambitious way to jump into an industry in my opinion.

Here’s what I say: Why limit yourself? By outsourcing work we’re removing all boundaries and limitations.

The wildest ideas can come true in as little as 2-3 weeks if you find the right developer.
Likewise, the simplest ideas can be finished in 1-2 days, and you’re off to the App Store.

You might be wondering what it would cost to hire a developer, or maybe you’re running names of developers you know that work at [your workplace here].

There’s a better, and more importantly, cost efficient way to have an app developed.

Why I Outsource…Overseas

Sure, you can ask Frank from your company to work with you. Or maybe your good friend Jimmy who got straight A’s in school. He’ll definitely figure all this out…and for cheap.

If Jimmy’s up for that, and he’s an amazing developer with tons of iPhone experience, then you’re in the extreme minority. Call him up!

For the rest of us, let’s eliminate all the risk of working with a friend, co-worker or family member. We’re going to outsource the work to a developer or, team of developers, to potential areas like Romania, Mongolia, Australia, the Philippines and India (all places I’ve outsourced to).

It costs less – you don’t have to worry about paying high, local rates. $1000 USD/CAD holds much more value in those areas as they do here. I had 3 apps (including 2 of my highest grossing) developed in 2010 for $3500. That’s been paid back to me many, many times over since then.

In my hometown of Toronto, many app companies won’t even blink an eye at your idea unless your project lands in the 5-figure range. Risky.

They’re experts – so you can rest easy while they work away on your idea. All of the developers I’ve worked with were developing apps years before I approached them. And before apps, they were developing in Objective-C creating other things.

By outsourcing your work, you’re leveraging their experience and they’re working at a fraction of local rates. A powerful recipe, indeed.

How I Outsource

Imagine a place where you could post a job for free and have experts line up, anxious to turn your idea into reality.

Well, that place exists, and it’s called Elance.com.

You could literally jump over to Elance.com right now and post an app idea (for free), and start receiving proposals within 24-48 hours (average first response time). I wouldn’t actually advise you take action that quickly, as there’s much planning to be done – however, you can definitely head over there and sign up for free so you hit the ground running once your app is fully planned out.

Ready to take Action?

• Read the ultimate guide on creating, outsourcing, and making money from apps
• Want me to help you build a profitable app? Let me know how I could help!
• Sign up for a free account over at Elance.com
• Start jotting down a few app ideas, and how you’d like it to function
• Have a question? Ask me!

To give you a small glance at the potential of this industry, take a look at the money I generated over the last holiday season:

Revenue Numbers from Nov & Dec 2011

Giving yourself an $18,000 raise? Possible indeed!

I’ve been fortunate enough to have experienced enough success (and failure!) to have built up a passive income by creating apps. It took about a year to get to this point, but the passive income generated from the apps has gotten me to the point where I no longer need a full time job to get by. In fact, beginning November 2011, my apps were quadrupling the salary I was receiving from my full-time consulting job.

I’m here to show you what I’ve learned so you can launch your very own app, and begin making money with it ASAP.

In February 2012 the contract ended with the company I was consulting for – it was bitter sweet because I built friendships there! However, it was a blessing in disguise because as I was finally able to focus on my business full-time. It allowed me to release updates for my apps, and also begin working on the blog you’re reading today.

The fact I had the apps as a fallback income was absolutely huge for me, and hopefully apps can play that same role in your life.

Questions are probably popping into your head. I’ll try to answer them pre-emptively:

How much did I invest to get to this point? Answer: Far less than the $18,000 I earned last holiday. I invested around $5000 to get my business up and running in September 2010, but you won’t necessarily spend that much, especially if you follow the tips and tricks I’ll be sharing on this blog, and through my free newsletter:

Am I making these amounts every single month? Answer: November and December are definitely the highest paying months of the year in the app industry because of the holiday rush, so the answer is no. However, I’m currently seeing around $4K+ per month on average, and am seeing MUCH higher  year-to-year revenue numbers.

If I did nothing for the rest of the year to build my portfolio, and the apps plateau’d (instead of growing as they have the past 6 months) I’d still make just over $60,000 this year without lifting a finger.

But that won’t happen, I’ve got my sights set much higher than that!

Why am I only showing Nov 2011 and Dec 2011? Answer: To show you the potential of this industry! Yes, November and December are typically the highest earning months of the year, but even during ‘regular’ months I’m seeing 4 figures for any 30-day period ($3-5K). Believe me when I say that a regular guy/girl with ambition & drive can make things happen in this industry. I’m by no means a big player in the App Store yet I would be able to live off of the income that my apps generate passively.

Bottom line: Even if you only made $18K in a whole year from your app business (as opposed to 2 months) wouldn’t it be easier than working longer hours, getting another job, selling , etc. ? The answer is obviously yes, but you’ll aim for more than that.

Enough about me…let’s talk about what this site can do for you:
(or if you really want to read about my story, click here)

MoneyandApps.com exists to help people build an iPhone app business quicker, easier, and cheaper than I did.

The Philoso-Apptor... He's wondering the same thing as you. I'm here to help both of you.

By following this blog, you’ll learn:

-> How apps can make you money in your sleep
-> The different ways to make money from apps
-> How in the heck I created apps with NO programming experience, and barely ever touching code
-> How you can avoid all the mistakes I made
-> From others who have succeeded in the app world via audio, video and text interviews
-> App marketing strategies

I highly recommend reading the following blog posts to familiarize yourself with some critical areas of indie app development:

• A Beginner’s Checklist to Starting your own App Business
• Ways to Make Money with your App
• My Secret Revealed: How I Make Apps
• Apps: An A+ Side Income or Backup Plan
• Success Story: How two guys make $800,000+ per year from iPhone/iPad apps

I’ll be posting many tips, tricks, and pieces of advice to the blog for free as I believe it’s my responsibility to give back to the industry because of everything it’s done for me. That said, I want to disclose that certain products I recommend to you (based on my personal success with them) may earn me a commission should you decide to purchase them. I never recommend anything I haven’t used myself, OR without showing you exactly how it can help you out – again, my job here is to show you the road to making money with apps, and give you all the tools to do so.

I’d love it if you’d stay tuned to the blog, and also sign up for my (totally unaggressive) newsletter where I’ll be sharing free tidbits here and there. You can sign up for that newsletter at the bottom of this post!

If you’ve got some burning questions you can always feel free to contact me. I check my email often!

Want me to help you build a profitable app? Let me know how I could help!

Welcome again to the M&A blog and thanks for reading!

Cheers,

Billy B.