My last Android app sales figures, and why it's still great to start a mobile app business.

tl;dr

I made quite a sum of money developing and selling apps on the Android market, peaking at $57,000/month (see chart below). Eventually, the business declined, but the rise to the top was an exhilarating feeling -- only it was too short. After the decline of the app business, I jumped back into a new startup, ZenPayroll to look for an equally exhilarating but longer ride. If you want to know what it's like to start a startup, but don't want to spend years of time and your life savings to see what it's like, an app business is a great, low-cost way to get a taste of what it could, or could not be.

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In 2008, I started Picwing. With just $15,000 from YCombinator, we made some hardware, then pivoted to software and ran the business for more than 2 years. It was an enduring time for my co-founder and I. More than a year of sweat, blood and tears was initially met with little success. But eventually, we were rewarded with slow but steady growth. After a small acquisition, I eventually left to try my hand at developing and publishing Android apps. My hope was that, compared to Picwing, which took years to build, I could develop and sell an Android app in mere months.

My hypothesis proved correct. Compared to the startup, my experience developing Android applications was much more fast-paced and eventful. It really started with a simple app I wrote called Car Locator in August 2009. After 2 months of publishing it, I was stoked to share in November 2009 through a blog post that I was making enough money to pay for my lunch. Things really started to take off in March 2010. You see, at that time Android was still a very small platform and many questioned its competitiveness with the iPhone app store, so many were surprised and delighted when I shared my success story of making $13,000/month in app sales. The news sent ripples through the tech community, and Car Locator came to be featured in magazines, radio shows, blogs, and even Verizon TV commercials. All this in just 6 months. As Android continued to grow, so I continued to ride the wave by developing and releasing more apps. The business reached a peak when I was doing $57,000/month in Android app sales.

I was stoked during my entire Android app journey. Watching these numbers grow week by week, and scheming on what I can do each week to affect it became my daily obsession and joy. In many ways, the ups and downs of my Android app "startup" was similar to that of Picwing, except things were measured in weeks and not months or years.

But things that rise quickly fall just as fast. My Android business was no different. The interesting part of the app business ended after less than 12 months and I was left thinking how I wished the ride was just a little bit longer. 

Richard Foster's book, Creative Destruction, shows that the average lifespan of a company in the Fortune 500 is about 15 years. How I wished my Android apps could have lasted 15 years! Unfortunately, due to the laws the govern app store rankings, which are set in place to incentivize developers to push "new and noteworthy" apps, the lifespan of a successful app business is significantly shorter -- on the order of 12 months.

And that's when it hit me.

Starting an app business is just like starting a "normal" startup like Picwing, only the timeline from start to finish is significantly compressed. The amount of financial investment you'll have to make is significantly lower as well. Of course, so will the potential financial reward, but I believe many of the lessons and experiences that took me years to acquire at Picwing, I could have acquired in mere months by starting my Android app business first. Most first-time founders will fail at their first startup -- the important thing is that if you fail, you fail fast and learn quickly from your experiences. Mobile app development is a great way for founders to take their first swing at building a company without risking a ton of time and money.

If you're thinking of jumping into starting a startup someday, and you're curious to experience what it's like before really diving in, I strongly suggest starting an app business first. You'll get most of the experiences -- good and bad -- in a much shorter period of time. If you like it you'll probably love doing a real startup.

ZenPayroll is culmination of my past 2 startup experiences and what I know will be my life's best work. I look forward every day to the new features we'll build and the customers we'll delight. But at the same time, I'll always look back at my 2 startup experiences with fondness and appreciation for what I've learned.


An Android Success Story: $13,000/month App Sales

Since releasing the “Car Locator” Android application about 5 months ago, I posted twice before with sales figures on the Android Marketplace. First, when I got excited after it averaged $20/day for a few days, and second, after winning third place in Google’s sponsored contest, the Android Developer Challenge 2. In both posts, I was a really happy camper because what started as a little side-project while I was vacationing with my family, turned into a few extra bucks for lunch money every day. I feel incredibly lucky to be able to say the app has continued its upward trend and is now beyond my wildest fantasy of what could have been possible. So without further ado:

Numbers

  • About 70,000 downloads of the free version.
  • 6,590 downloads of the paid version
  • Price of the app was raised from $1.99 to $3.99
  • The app steadily climbed the charts, briefly reaching a peak of #4 in the Travel category for paid apps.

Analysis

  • The application was netting an average of about $80-$100/day, until it became a featured app on the Marketplace. Since then, sales have been phenomenal, netting an average of $435/day, with a one day record of $772 on Valentine's Day. Too bad I didn't have a Valentines date this year -- we would've gone somewhere real special!
  • There appears to be clear peaks on the weekends and during holidays. This was always my hunch, but I think I can finally say this with certainty since the signal-to-noise ratio is much better now.
  • Some may be quick to point out that a featured Android application is only able to net $400/day, while top iPhone apps make thousands. But the Android market appears to rotate applications in and out of the featured apps list in some psedo-random fashion. Every time I open the Marketplace app, the featured list is different and most of the time, I don’t even see my app on there.
  • The price of the application was increased from $1.99 to $3.99. I ran a few price experiments and was surprised to see that though I doubled the price of the app, the number of purchases decreased by much less than half. Android users appear to have a willingness to pay more than a couple dollars for apps.
  • Piracy appears to be an increasing problem. A quick search for Car Locator on Twitter reveals links where people can download the .apk file without paying. I tend to have the same attitude on piracy as Balsamiq, so I'm not too worried about it, but I would love to hear some typical statistics on Android piracy.

Clearly, I'm on cloud 9 with these numbers, but where does it go from here? Sales of about $13k/month is awesome income for any one person, so it may sound ridiculous for me to think it can go even higher. However, I still think that Android is only a fraction of what it will eventually become. Each release of a new Android handset gets me excited, as it means a wider reach for the Marketplace.

If Android development is something you've been mulling over, I encourage you to make the leap. Though my experiences are clearly not typical, I definitely think Android is the ideal platform to be in for an individual developer.

I'll post again in a month or so with hopefully even better numbers!

Android Sales Figures After Placing 3rd in the Android Developer Challenge 2

I posted a few weeks back on my Car Locator Android app sales figures. I was pretty excited when my app netted a record $44.00 in sales shortly after it was announced that my app made the final round of the Android Developer Challenge 2. I was hopeful that sales would settle around $20/day, and was content with the app making just enough money to pay for my meals everyday.

It's been an exciting 3 weeks since then. One of the highlights of my day is logging into my Google Checkout account, tallying up the number of sales of my app, and plugging the number into my excel sheet every evening (yes, I know, I live a simple life). Last week, I released version 2.0 of the app with a lot of new features. But the really exciting news came when I heard from Google that my Car Locator app placed 3rd in the Travel category of the contest, winning me a nice $25,000 prize.

Needless to say, things are looking up for Car Locator and I couldn't be happier with the way things turned out. I'd like to share with everyone some updated numbers since my last post.

Numbers

  • About 39,000 downloads of the free version.
  • 959 downloads of the paid version at $2 each.
  • At last check, the app was ranked #14 in the Travel category for paid apps.

Analysis/Remarks

  • I recently discovered a bug in the free trial of my app that caused it to never expire, making it essentially the same as the paid version of my app. Oops! Amazingly, people were still buying the full version. This has restored my faith in humanity.
  • The spike around November 23rd coincided with the release of Car Locator 2.0.
  • The spike around December 1st coincides with all the press/blogs covering the ADC2 winners (for example, here, here, and here). Sales for the past 3 days have exceeded $100/day, with the record being December 2, at $156.00.
  • Having a visible position in the Android Market is vital to the success of the app because there aren't many avenues for an Android app to get exposure other than the Android Market. Your rank on the Android Market appears to be some combination of your average rating and number of downloads. Obviously, this is sort of a chicken-egg problem for developers. The recent string of fortuitous events for my app was enough to push it into a high enough position to get enough visibility. I hope it's able to stay there.
  • Sales of the app is still nothing I can live off of, but it's definitely paying for more than meals at this point, and is providing some nice extra income. Especially after winning $25,000 from the contest, I now owe a lot of dinners to friends!

My Humble Android Sales Figures

Posts on the Apple app store sales are pretty easy to find, but I haven't seen many Android developers sharing their sales figures. Though I wish I had some more exciting numbers to share, I thought people might be interested in hearing my sales numbers anyways.

Background

Before diving into the numbers, lets put things into context.

  • Car Locator is a pretty straightforward app: Save your location when you park your car, and the app will navigate you back to your car later. I've also heard of it being used to locate hiking trail heads and for Geocaching. The app goes for $1.99 on the Android market.
  • There is also a free version of the app.
  • I've done no marketing on the app.
  • The Motorola Droid phone was also released on November 6.


Numbers

Car Locator has been on the market for a little more than 2 months. Since then, I've seen:
  • About 23,000 downloads of the free version.
  • 220 downloads of the paid version.
  • At last check, the app was ranked #21 in the Travel category for paid apps.


Analysis/Remarks
  • In the first 2 months, the app saw sales of about $5-6/day. Nothing too fancy. But starting November 7th, there's been a significant uptick in sales, peaking on November 9, where the app saw $44 in sales.
  • Sales have since settled to about $20/day, but it's probably too early to tell if this will hold.
  • I'm attributing the recent uptick in sales to 2 factors: (1) The release of the Droid phone and (2) Car Locator being in the final judging round of the ADC2 contest. It's impossible for me to tell how much of factor each of these play, since both events happened on the same exact day, but I would be interested to get some more data points from other developers.
  • Ironically, it seems to me that it's easier to get exposure as a paid app rather than a free app. Here's why: When you open the app store on your phone and select a category, the app store first shows you a list of paid apps in that category. Car Locator is the 21st app on the list in the Travel category -- It's pretty easy for someone browsing the store to see the app. However, if you select the "Free" tab, I can't even count how far down the list the free version of Car Locator is -- No one would really find the free version of the app without explicitly searching for it.
  • Though sales of the app is nothing I can live on, it is kinda cool thinking that the app has been covering the cost of my meals recently. It's nothing compared to the stories you'll hear on the Apple app store, but I personally beleive that with the release of many new Andoird-based phones, Android has more long-term potential than the iPhone.