The Basics of Creating an App Business
Learn About The App Business with Chad Mureta
Chad Mureta is the author of App Empire, the founder of Empire Apps and co-founder of T3 Apps and Best Apps. His apps have been downloaded more than 35 million times.
Editor's Note: This is an original interview between Chad Mureta and Brian Haines. Additional comments provided by Online Business/Hosting Expert Brian T. Edmondson are in italics.
To get started, let's cover a few of the basics. Then we'll move on to the How To Create An App Business.
Bryan: What is an app?
Chad Mureta: An app is an application that is on your mobile device. This is anything from a game like “Angry Birds” to a built-in program like “Weather” or “Notes”.
Bryan: How old is the industry?
Chad Mureta: This industry started with the first app stores (iOS and Android) in 2008. People always ask me about the potential to succeed in a crowded marketplace, but the market is extremely young and still in its early stages. There’s plenty of development still left to uncover.
Years later creating an app is still an excellent way to reach a new audience, stay in touch with them, and even add an additional revenue stream to your business. Relative to other mediums (like blogging and social media) there is still a relatively small amount of competition. No matter what business or market you're in you should seriously consider developing an app to supplement your website and online marketing methods.
Bryan: How does an app transaction take place? Please walk us through the steps.
Chad Mureta: It begins with an app! The mobile user taps on the app that brings them to their “app marketplace.” From there the user can search top charts, categories, or enter keywords in the search bar to find an app that interests them. They see a title or icon that catches their eye, then taps on that app to bring up more info. They read the app description, see its star rating, and then scroll to the bottom to see the screen captures. They usually have made their decision to purchase already or choose to “read reviews” to make sure they want the app. Then it takes two taps and sometimes a password confirmation to purchase and install the app on their device. Developers are then paid once a month when Apple distributes the funds into their account from all downloads.
As mentioned above, some of the key ways to make your app stand out and get attention (and downloads) are to have a catchy app design, a good description, and the right keywords and categories to get found. Many websites will have a feature where when you go to the website it will automatically pop up an option to download the app instead of using the regular website on a mobile device.
Bryan: How far away from app saturation are we?
Chad Mureta: This is one of the top concerns people have. Like I said, the app marketplace is extremely young. No one knows this answer, but everything is moving from computer to mobile so there is a lot of life and opportunities left to this business.
This is still true today!
Bryan: What type of apps are most popular? Most profitable?
Chad Mureta: Obviously games are extremely popular and profitable. Angry Birds is a franchise now. It’s much more than just an app. However, people often assume gaming is the way to go. But there’s a need for all types of apps. It’s not only the apps in the headlines that are making lots of money. Simple ideas such as to-do lists, guidebooks, and flashlight apps are getting hundreds of downloads a day.
It really doesn't matter what market you are in, there is an opportunity to use apps to have a new audience find you, keep up-to-date with that audience, and even monetize that audience via apps. Again, an app could simply be an app version of your website.
Bryan: What processing fees/ charges do you incur from the iTunes Store?
Chad Mureta: You pay a fee of $99/year to be an Apple developer and Apple takes 30% of your app’s price per download (so for a $100 app, the developer gets $30 for every download) unless it’s a free app from which Apple doesn’t take a cut.
A free app is a great way to get a lot of downloads and build your audience through the app store. Rather than trying to make money up front with a paid app, you can get a lot of free downloads and monetize with ads in the app, marketing your products or services, etc.
Bryan: What apps do you use to run your business?
Chad Mureta: I use the Apple Developer app to look up my rankings and account, Uber comes in handy as a car service when I’m running around, I use Yelp for finding food, I use Task Rabbit for last minute errands, Basecamp for business organization, Skype for calls, and a Google Docs app to access documents on-the-go.
For people who make money online with an online business popular apps include social media marketing apps to manage your Facebook pages, Twitter accounts, LinkedIn and other social media marketing platforms. Also apps to quickly design social media graphics (such as Canva) are extremely popular.
Bryan: What do you recommend people do to get started?
Chad Mureta: Research! Download tons of apps, look at the charts every day and write down your observations. So many people have a great idea and they don’t understand why they can’t get downloads. A while ago, I wanted to develop a yoga app, but I decided against it after doing research and seeing there weren’t any yoga apps with high rankings. A year later, yoga apps were popping up and then it was time to strike. Every now and then revolutionary ideas happen, but generally, you want to start with apps that already have a need so you can build up revenue before delving into your game-changing ideas.
If you see that there are already apps in your marketplace that are doing well on the app store, then that is a good sign that you could be successful with your own app, don't let competition discourage you; rather use it as a clue that you can reach your own niche market with an app on the app store.
Edited by Online Business/Hosting Expert Brian T. Edmondson