28 July 2014Jared Sinclair:
Unread for iPhone has earned a total of $32K in App Store sales. Unread for iPad has earned $10K. After subtracting 40 percent in self-employment taxes and $350/month for health care premiums (times 12 months), the actual take-home pay from the combined sales of both apps is $21,000, or $1,750/month.
Considering the enormous amount of effort I have put into these apps over the past year, that’s a depressing figure. I try not to think about the salary I could earn if I worked for another company, with my skills and qualifications. It’s also a solid piece of evidence that shows that paid-up-front app sales are not a sustainable way to make money on the App Store.
You have to be efficient with your time to make good ROI’s on the App Store. I think that is a much more important than what app pricing model you choose.1 Betting on apps of incredibly large scale means you bear proportionately more risk, with the possibility of no return whatsoever. If you want to maximise your profitability, make small apps that do a few things well. The amount of effort you put into an app has very little to do with how much of the market will buy it. This means that making big apps exposes you to substantially more risk, which is not fairly counterbalanced by significantly higher earnings potential.2
In my opinion, you make money on the App Store by selling small things — it’s very nature is a bitesize marketplace. This is how you maximise your effective hourly wage. This doesn’t mean you have to turn around crap. You can still output quality pieces of software. Pour your heart into something for a short while (a month, maybe three), then ship it. Make your easy money (the first couple of weeks of sales). Iterate until interest dies away. Work on something else. Repeat. If something becomes a smash hit, then by all means develop it.
Unread is the complete opposite of this, it’s a beast of an app. It took Sinclair a year of development time. As a result, Unread faced massive risks when it finally shipped. Recouping months of development time is a lot more painful than recouping weeks of work. Sometimes you will get lucky, often you won’t.
I made Writing Aid in under a month, on and off. Thankfully, it sold well and produced a fantastic sales to hours ratio. Imagine a scenario where it didn’t do that well. I would have essentially wasted a month of work … but that is a hell of a lot better than wasting a year of work. You hedge your bets by moving fast and moving on.
1 To date, every app I have shipped to the store for myself costs money up front. I am yet to resort to In-App Purchase.
2 Sinclair is annoyed that he formed a band and made a (well received) album that doesn’t earn enough for him to live a life as a rock star. I think indie devs should make songs, not albums.