A podcast discussing news of note in iOS Development, Apple and the like.


#181: Unconventional wisdom, pricing.


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T-shirts

I am doing another run of t-shirts for the show. After I did the campaign for them last fall I heard from a lot of people that they missed out. This year I’m giving the campaign a nice long run (through April 28). The shirt design this year combines three distinctly geeky things—underscores, square brackets and fixed width fonts.

Shirts are $14.59 (never longer than 15 minutes). Get one at http://teespring.com/developing .

Wrapping up

I have published the consolidated, summarized article for my Towards a Better App Store series.

Unconventional Wisdom

Today I thought it might be fun to start another series of episodes. I like doing series because then I don’t have to think so much about my topic each week. The concept I’m starting with is modeled a bit after debate exercise where you are given a topic or statement then told to take either the pro or against position. The process of having to defend either side of an argument often helps to think in ways you wouldn’t otherwise. Along those lines I’m going to try and take the intentionally contrarian position against ‘conventional wisdom’ in the software business.

The result is something that isn’t 100% my actual position on things but should be productive and hopefully thought provoking nevertheless. I’ll be making sweeping, un-nuanced statements for effect. As with everything in life, it is more complicated than I’m going to present it. The interesting part of being in business is navigating that nuance for yourself.

The first topic I’m going to attack is pricing.

Paid software is good customers and developers?

When I first got into the software business nearly 6 years ago the prevailing ‘best practice’ for software sales was to charge a reasonable up front price for your product. Then provide minor update and bug-fix update patches for free. Then charge (with upgrade pricing) for each major update to the product. This model had worked pretty well for many years and had grown up in the era of boxed software. More importantly this system had been widely accepted by customers as reasonable and appropriate.

It is, however, an awful way to sell software. For, at least, 3 reason.

Barrier to entry

Software typically has an extremely low marginal cost. Unless you are hosting media for your customers you can typically add one more customer to your user-base for a tiny cost. Even with things like customer support you each additional user is essentially free. As such charging a large up front amount for your software doesn’t make sense. This pricing model could only be maintained in an uncompetitive marketplace. Otherwise, you will quickly be undercut by someone else who is willing to lower their prices, to get them closer to their marginal costs.

You are also scaring away potential customers. Often the hardest part of selling software is getting it known to potential customers. If you finally have a customer considering your product (after whatever long, drawn out marketing effort) and then you put up a barrier to them then actually getting it you are shooting yourself in the foot. That is likely your only chance to convince them to download it, make that process as easy as possible.

Unsustainable

The paid software model is fundamentally unsustainable. To most clearly demonstrate this imagine a world where your paid sales are going well, you’ve built up a reasonable customer-base of happy users and then suddenly your sales drop off. The reason for the drop off isn’t particularly important. You now find yourself in an extremely awkward position. You continue to have expenses and have made commitments for minor updates to your customers but have no income to back them up. You either need to start squeezing your existing users progressively harder for additional income or go out of business.

The fundamental flaw in this model was that each purchase was necessarily short-lived. You had no plan to make a continuous income from your product. Each day you need to find more people to buy your software. A process that will be progressively harder and more expensive to do. You’ve spent all the good-will of your customers all once.

Imagine instead a business model that is based on subscriptions or advertising. This is far better. Now your viability as a business is directly based on how used your software actually is! Should your application fall out of favor and your customers stop using it, then fine, your income drops but nobody has any commitments that you are then not following through on if you cease development. If it is wildly successful then you have a virtuous cycle of more revenue for more development.

Horribly Abrupt

The nature of the paid model is to get large bundles of income along with significant updates. Your sales will often then fall down dramatically thereafter. This means that you are essentially in a feast-and-famine cycle. You need to store up and be frugal enough with the days of plenty to survive through the days of want. I can say from experience this is horrifically stressful. As you chip away at your storehouse your level of comfort will dramatically reduce. While conceptually you could say that it is functionally identical to getting the same overall amount evenly over the same period, human nature says otherwise. There are few things as comforting as a dependable, consistent income. Something paid apps simply don’t provide.


#180: Enduring Features.


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I hope you fared better in the WWDC lottery than I did, though I’m hopeful for a possibility of a second round on Monday (maybe?). The system and process generally went really well and I think this is likely the process we’ll see going forward. It isn’t perfect but is as good as I could imagine.

Improving the App Store: Part 5

Ratings

The star rating of an application is the most important aspects of the sale experience that is outside of the developer’s direct control. It is displayed on every page and instance where your app is shown and gives the customer a general cue about the quality of your app. As such developers tend to take whatever actions they can to increase it. If this were just a question of improving the quality of their apps that would be fine but that isn’t where most developers stop off. Not to reopen the tempest about prompt dialogs, but there are a lot of potentially dubious and tricky things developers can do to try and ‘artificially’ boost their ratings. There are also some really solid, thoughtful ways to accomplish the same goal.

My general recommendations about ways this could be improved.

  • Define a clear policy about where, how, and when applications may prompt for reviews.

Much of the discussion around the dialog prompts stemmed from a feeling that ‘everyone was doing it’ so ‘I need to too’. The best way to reward earnest developers who are trying to optimize for their users’ experience is to level the playing field by establishing exactly what is permitted.

  • Make the rating scale a rolling, weighted average rather than just current, at least soon after updates.

I remember when Apple changed the review score from a global average to only the current version. This was an attempt to make sure that a single buggy version didn’t forever hang around your neck. It also makes the reviews perhaps more reflective of the experience the customer should expect. The challenge though is that immediately after submitting your update your reviews all go to zero which gives the customer a very different perspective about your app. It makes it look unused or low quality. This discourages updates and encourages annoying your users with review prompts immediately after updates. Either show the overall average or a rolling, weighted average, even if only recently after update.

Editorial

While the role and scope of editorial (feature) coverage of the store has been steadily improving over the years I think there is still a massive amount of room to be done here. Apart from the top lists, the featured area is probably the most visible place your app can be found. Building an app with the goal of being featured incentivizes quality, thoughtful and relevant app creation. Which is great but means that the value of being featured should be less abrupt.

  • Expand the scope and frequency of editorial coverage in the Store

It seems very odd that features are only ever updated once a week (typically thursday afternoon). New apps are added to the store constantly, updates are submitted constantly, it seems like features should be updated accordingly. I’d love to see things like ‘daily picks’/promotions or similar. Things that could potentially drive user engagement with the App Store app, checking in on what is new and interesting.

  • Make an app’s featured status visible after their initial feature

If an app is featured I’d love to see some kind of badge or notation on its App Store page promoting its selection. Apple has already taken the time and effort to identify apps that are worth the user’s attention, why not communicate that to user’s on the actual product page for the app. Similarly I’d love to see the curated lists that Apple puts together show up as search results. For example, if you search for ‘accounting’ the featured list for “Managing your Money” would seem like a great place to present the user with some apps that might be worth initially considering. This has the added benefit of improving the quality of search results.

Categories

  • Expand the diversity of categories associated with each app.

Lastly I’d love to see the variety and specificity of categories you could assign to an app be expanded. The current metadata assignment into one of only 24 categories seems paltry when trying to catalog over a million individual apps. I’m sure based on the search data that Apple has at its disposal I’m sure they could subdivide of the existing categories into several useful sub-categories (much like how games are treated). This would also help improve the relevance of the top charts. Being the top app in a more niche sub-category might be genuinely useful for developers and customers alike.

This concludes this series on the App Store.


#178: Customer Escape Hatches


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After taking credit ;) for Apple’s experiments in search improvements I dive into a few changes to the App Store that could improve doing business in the store.

Make the App Store Refund policy more obvious

I really don’t understand why Apple makes the refund process so opaque and awkward. I know from my own experience in physical stores that a clear and easy refund policy helps drive sales. It is far better than a ‘trial-mode’ because it sustains the value of the app (rather than giving it away for free then asking for money later). However, it still maintains that escape hatch for purchases unsure of whether they really want the app.

I’d love two things, neither of which are actually policy changes.

  • Educate App Store customers about what the policy is and ideally phrase it in clear terms.

I’m sure there is an internal policy within Apple customer support, but I haven’t been able to find a clear explanation of it. The legalese Terms and Conditions for the App Store states that “All sales and rentals of products are final” but that is clearly not the actual policy since people get refunds all the time. Whatever the policy is this should be clear the customers.

  • Make the process of applying for a refund clear and straightforward.

Right now you go to reportaproblem.apple.com and then fill in a form. I’d love to see this integrated into the App Store app itself. Perhaps even into the Purchased Apps area.

Make in-app purchases (especially consumable) more honest

Building on a blog post I wrote last year I would love to see the App Store better inform its customers about how in-app purchases will affect their experience of an app.

  • Present a typical overall cost for an app in the App Store description

Make it clear that when you are downloading an app that says ‘free’ next to it that you may not actually be making the less expensive choice. Also, provides a clear expectation about the type of app the user is about to interact with.

  • Show how much you have spent on the app with each new purchase.

Be upfront with the user about how much money they have spent. Allowing them to make a more informed (and less manipulated) decision.

Drop or reframe the Top Grossing Chart

The Top Grossing chart was ostensibly added to help improve the visibility of higher paid apps within the store, at least that is how it appeared to me externally. If that is the goal it entirely fails to do that. Either drop the list or perhaps change it to only include paid apps, or at least exclude consumable in-app purchases from the ‘app revenue’ number.


#177: Something in Mind.


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I will be at NSConference next week, if you are a listener of the show please make sure you find me and say hi.

Continuing my series of Towards a Better App Store, trying to find practical suggestions for how we could improve the App Store. Today I’m going to focus on Search.

  • Physical Design: Make the cards interface for search optional (if not eliminated).
  • Ranking: Rewards or punish applications based on objective measures. For example, recently updated, crash frequency, refund requests, reviews, etc.
  • Curation: While still algorithmically based periodically vet the most popular keywords to ensure good relevance.
  • Power Search: Add the ability to filter and manage search results to more finely tune the results.