The Gold Rush Never Started

David Barnard, indie developer of fine iOS productivity apps, took an awesome look at Sparrow this week. He was able to closely compare it to his own development of Launch Center Pro. For those unaware, Sparrow was a highly publicized email client for Mac OS and iPhone. Most people loved its design. Late last week it was announced that Sparrow sold to Google, who promptly discontinued development. Lots of people (customers, developers, pressmore and more) all chimed in on the good, the bad and the ugly of this.

David’s comments mirror my own productivity app experiences:

Sparrow did everything right. They built an incredible email app with broad appeal and released it into the hottest software market the world has ever seen. And yet it was a financial flop.

Keep in mind that this app, and David’s Launch Center Pro, are some of the most successful apps ever launched in the App Store. They are among the Top 0.1% of all productivity apps ever launched, and David’s response is that Sparrow was a financial flop. Read the post because he goes on to demonstrate exactly why it was a flop.

It is important to note that David’s post is geared toward productivity apps in particular, but here is his spot-on conclusion:

The age of selling software to users at a fixed, one-time price is coming to an end. It’s just not sustainable at the absurdly low prices users have come to expect. Sure, independent developers may scrap it out one app at a time, and some may even do quite well and be the exception to the rule, but I don’t think Sparrow would have sold-out if the team — and their investors — believed they could build a substantially profitable company on their own. The gold rush is well and truly over.

I’m not convinced, though, that there ever really was a gold rush in productivity software. Games [1], yes, but not productivity apps. A few of us have been able to scratch out a lower-than-market-wage living for the past few years but I think those days are coming to an end, too, for 99% of developers.

As I look ahead I am uninterested in one-off revenue applications. Without being paid to do so, I doubt I will ever write one again. [2]

[1] And even there the games market is abandoning one-time paid apps for recurring revenue models using in app purchase.

[2] To my existing customers who will inevitably ask: yes, we are getting paid to write for Android. It will be a one-off priced product similar to the iOS version.

One thought on “The Gold Rush Never Started

  1. One thing that the original article does not take into account is paying for ad placement to stay in the top n apps. If you have a good product, there are established channels to pay per user, and given a fixed cost App, it is pretty easy to figure out how much you can pay for a user. Typically it runs $0.5 – $3, depending on the needs. Also note that the cost per paid user can be reduced based on the number of organic installs you get, which increases as the number of paid installs increases, and therefore, your position in the category.

    Having said that, yes, the one time pay per App business sucks. I too have an App in the store that did great the first couple weeks thanks to being a Featured App (at least in the Canadian store.) After that, it quickly drifted down and now only gets a few sales per week. Nowhere near worth investing in advertising.

Comments are closed.