Possibly 98.4% of developers living on it
A recent report – based on research by Vision Mobile, entitled ‘Developer Economics Q3 2014: State of the Developer Nation‘ revealed that many app businesses currently are not sustainable. Crucially, the report found that just 1.6 per cent of developers generate most of the app store revenue. Martin Macmillan, CEO with new FinTech company Pollen, appears to have coined a new phrase for this – the “app poverty line”. Thus, in effect, as many as 98.4 per cent of mobile app developers may be living below the app poverty line. Hence Macmillan offers useful advice to developers. Talking to Pollen itself is the tip he neglected to mention.
“Knowledge and understanding of user acquisition is often lacking for those mobile developers operating below the ‘app poverty line’,” Macmillan observed.
He continued, “In such a saturated app market – where consumers are fickle and apps are viewed as disposable, ‘hope’ is not a suitable business strategy.”
He points to research from Gartner reported earlier in 2014 which showed that less than 0.01 per cent of consumer mobile apps would be considered a financial success through 2018.
“Today, you must spend money to acquire users. Developers need to ‘test’ their target demographics to work out the best ROI on campaign spend, and attribute to those users acquired via identified ad networks, before embarking on a paid user acquisition campaign.”
“Once tested, developers need to focus on reinvesting early app earnings directly into advertising.
Payments from app stores, which can take over 60 days often hit little guys the hardest.
Macmillan claims, “Today there is a large disconnect between the digital economy and old-school payment cycles – an aging model which we’re looking to disrupt.”
How is Pollen going to do this? Well, the company supports developers throughout the app development life cycle.
As we report in ‘Fund pays app developers in 7 not 60 days‘ back in May 2014, Pollen announced it would deploy $150 million of Velocity capital to fuel app developer growth
This news is particularly relevant to independent developers. So go get those funds guys.