MOBILE DEVELOPER’S GUIDE

TO THE PARALLEL UNIVERSE

The Companion Guide of the

MOBILE DEVELOPER’S GUIDE TO THE GALAXY
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5 INTRODUCTION
5 Moving at the Speed of Mobile

7 START WITH A PLAN

7 Parts of the Plan

9 PRODUCT DEVELOPMENT & LIFE CYCLE MANAGEMENT

10 Agile Marketing & Development Lifecycle
11 Matching Cycles
13 The Art of Pivoting
13 Versioning
14 User Experience
14 The Difference between Graphic and Interface Design

17 MARKET RESEARCH
17 Who is my customer?
22 Information that can’t be found
23 Who is my competition?
23 Device and Technology Choices
24 How to Find Beta Testers
27 MERCHANDISING YOUR APP FOR DISCOVERABILITY
27 What’s in a Name?
29 Branding and Collateral
31 Promotion
31 Website
34 Advertising
34 Co-Marketing
35 Social Media Marketing
36 Viral Optimization
37 Events and Tradeshows
38 Partnering
38 Sponsorship
39 Networking
39 Guerrilla Marketing
40 Get Featured!
41 Public Relations

43 BUSINESS DEVELOPMENT
43 Meeting the Right Contacts
43 Network with a Purpose
44 The Art of Getting an Introduction

47 DISTRIBUTION
47 Appstores
48 Choosing Your Appstores
49 Multi-store vs. Single-Store Strategy
51 Which App Store?
52 Marketing Alongside Appstores
54 Marketing Within Appstores
56 Alternative Methods
57 Pre-loaded Apps
59 BUSINESS MODELS
59 The Many Purposes of Apps
60 Working With Telecom Carriers

63 REVENUE MODELS
63 Pay to Play
63 Freemium
65 Free to Play
65 In-app Payment
66 Subscriptions
68 Mobile Advertising
69 Blind Networks
69 Premium Ad Networks
69 Premium Blind Networks
70 Ad Exchange
71 Benefits of Mobile Advertising
73 Tips for Generating More Revenue From
Mobile Advertising

79 MEASURING CUSTOMER ENGAGEMENT

79 Why Bother?
79 How to Get It

83 RAISING MONEY
84 What Do You Need Before You Approach
Your First Investor?
85 Who Do You Approach?
86 The Venture Capitalist
86 What Do Venture Capitalists Look For?
89 What Do VC’s Hate?
89 Alternative Investment Sources for the Smaller Raise

93 CHECKLIST

95 ABOUT THE CONTRIBUTORS

Introduction 4
INTRODUCTION
Welcome to the 1st Edition of the Mobile Developers Guide to
the Parallel Universe. Warning: This Guide is about marketing
stuff! Applications don’t sell themselves. In order to be success-
ful, developers also need to be fluent in the language of market-
ing. This guide aims to simplify the process and steps of market-
ing; and provide a few tips and tricks. It is a Companion Guide
to the ever popular Mobile Developers Guide to the Galaxy, now
in it’s 10th Edition which focuses more on the technical issues
of mobile application development.

Moving at the Speed of Mobile

Mobile is like no other industry in terms of its global reach,
impact and the speed of change. Mobile development is not for
the faint of heart due to the:

—— Shortened product cycles

—— Big demand
—— Amount of developers
—— Small companies & big companies
—— Huge growth
—— Immense fragmentation
—— New Entrants, especially those unfamiliar with the nuances
of wireless networks and fragmentation.
—— Big fun!

All this means more competition, but more innovation and more
opportunities too. There’s never a dull moment!

Introduction 5
6
START WITH A PLAN
You have a plan, right? Even with the good building blocks of
your chosen platform, great coders and a good idea, if you don’t
have a plan, you may end up with an app that only lasts 30
days on the market, or worse, doesn’t make it to market at all.
According to a survey by WIP (August 2011), only 63% of de-
velopers had a business plan, whereas 37% “just got down to
coding”. So, if you have a plan—you are already a step ahead of
a lot of your competitors.

Parts of the Plan

A good business and marketing plan should include these
components:

1. Market research
2. Product development & lifecycle management
3. Revenue and business models
4. Promotion, marketing tactics, distribution and
merchandising
5. Measuring Customer Engagement 1. 5.
6. Raising Money 3.
2. 6.
This guide will review all of these parts. 4.
As you read, take note of how you can use
the strategies and tactics to push your app
to success. Remember—a good idea is just
the beginning!
Idea

Repeat:
Early & Often

Start with a Plan 7

8
PRODUCT DEVELOPMENT &
LIFE CYCLE MANAGEMENT
Before we dive into the guts of the marketing and business
components, we wanted to mention product development so it
is clear where it fits with marketing.
There is no shortage of software development methodolo-
gies to choose from—the construction cycle, the V-model, test
driven model, agile development etc. Choose which one works
best for you, but realize that most of these methodologies miss
two important components:

1. The Customer needs to be at the center of everything.

2. Marketing should work in parallel every step of the way.

Product Development & Life Cycle Management 9

Agile Marketing & Development Lifecycle
Take a typical web development cycle (first diagram below), which
only gives partial consideration to marketing. In order to drive
success, we have to change the model to the lower diagram, where
marketing runs through all aspects of the product development
cycle; we call this the Agile Marketing & Development Lifecycle.

Research /
Analysis

Maintain / Prototype /
Evaluate Review

Development /
Market
Debugging

Testing /
Deployment
Certification

Research /
Analysis

Maintain / Prototype /
Evaluate Review

Marketing
Development /
Deployment
Debugging

Testing /
Certification

Product Development & Life Cycle Management 10

Matching Cycles
There is no exact science with these models, and you may move
through one cycle very quickly or miss a phase entirely, but it
is important to match your development and marketing cycles.
Marketing starts on Day 1!

Here are some examples:

Development Cycle Phase Marketing Activity

Research & Awareness

Go to conferences and events to check
Research & Analysis out your competition, potential partners,
and start taking about your ideas.
Warm up to investors.

Start a blog, talk to bloggers, warm up

your social media tools, build relationships
Prototype Review
with all parts of the ecosystem, Speak at
events to get known, tweeting.

Development/ Start a beta group for testing along with

Debugging key influencers.

Enter contests, test product and company

Testing/Certification names and marketing verbiage, test in
localized markets like Canada.

Appstore strategy, key words, co-marketing

Deployment arrangements, launch events, Freemium
models, advertising.

Maintain/Evaluate Traditional advertising, analytics.

Product Development & Life Cycle Management 11

So your matching cycles start to look like:

Development cycle

Research /
Analysis

Maintain / Prototype /
Evaluate Review

Development /
Deployment
Debugging

Testing /
Certification

Marketing Cycle

Awareness / Buzz,
Social Media

Analytics, Build Ecosystem,

Friends, Discovery Relationships

Co-market, App- Beta Release for

store advertising early Feedback

Event   attendance
Contests

Product Development & Life Cycle Management 12

The Art of Pivoting
Q: How many Apps does it take to be successful?
A: In all likelihood, it is going to take more than one
big idea.

According to the WIP survey, 30% of developers made at least

two apps before success, 25% experimented with 5–10 apps and
16% created over 10 apps! Don’t be afraid to take risks, try dif-
ferent concepts, and pivot to stay in the game.
Consider Rovio, who struck gold with Angry Birds—their 51st
app! Then, take Appalachian Apps, who started with a language
translation app, but soon realized the competition was too
fierce. They quickly pivoted and found their way to success with
StraightSpittn, a HipHop song creation community app!
Changes don’t always have to be big and can be small tweaks
along the way. Just because your first idea fails doesn’t mean
your company has to fail.

Versioning
Write once, deploy and wait = #fastfail!
As you update your app or pivot for a new twist, ask yourself:
“is this a new version or just feature creep?” Don’t get caught up
in “just one more feature”. Rather it is important to understand
why you are sending out the next version. As well, it has been
shown that regular updates rather that one big version push,
keeps your customers much more interested in continuing to
use your apps.

13
When you launch a new version—you must consider all of these
three components to #win!

Version X.0

1. Features & Functions

2. Marketing & Promotion

3. Revenue Model

User Experience

The Difference between Graphic and Interface Design

On the surface, these two design disciplines appear alike, if not
identical. However, in practice, interface design accounts for
psychological and user behaviors, usability, and most of all,
making software simple, functional and easy to use.
Graphic design, meanwhile, is typically comprised of the art-
work assets, UI (User Interface) visual controls & styling, logos
as well as the overall visual aesthetic.
While the line between them can often blur, achieving a ba­
lance between the two is essential to the overall success of an
application. Consider a designer with interest in the “user expe-
rience”—this person should likely focus on the interface design
and perhaps collaborate with a business analyst who can care-
fully define the desired behaviors, error conditions and elements
of user interaction. Meanwhile, a designer with more of an art
and UI focus should likely concern themselves solely with the
graphic design (e.g. the sprites, logos, headers, footers, etc.)
that results in a piece of software.

Product Development & Life Cycle Management 14

 Ultimately, well-designed software must account for logical
user flow, navigation, error handling, functionality and provi­
ding a foundation for growth all while balancing its overall visual
aesthetic and attractiveness.

15
16 16
MARKET RESEARCH
Who is my customer?
“Voice of the customer” is an oft-used, but not fully understood,
phrase to express the valuable insights market research helps
you uncover about your customer base. Market research is not
simply asking customers what you should do; it is about under-
standing who your customers are, how they perceive the world,
why they have such perceptions, and how those perceptions im-
pact their response to—and engagement with—your products.

Market Research helps you understand your customer and an-

swer these questions:

Consumer or Enterprise
Who is my Customer and/or end Demographics/Segmentation
user? (note: they may not be one —age, gender, education,
and the same!) profession, needs, subcultures,
income

Geography, City/Country
Where do I find them? And how
Which operator do they use?
do they find my app?
What type of device?

How do I get them to love and

What do they use an app for?
use my app?

Here is a great resource for market research information

http://www.cloudfour.com/a-comprehensive-guide-to-mobile-
statistics/
Market Research 17
 The strongest market research projects are custom investiga-
tions, tailor-made to fit your objectives—from large-scale na-
tional quantitative surveys, to dynamic qualitative focus groups,
to immersive user-testing sessions, to real-world ethnographic
observation and analysis. There are many ways to gain insight
into the true “voice of the customer”.
In the course of ideating, developing, deploying, and im-
proving mobile apps, targeted market research is a critical tool
to ensure marketplace success.

Initial ideation
Research goals: Clarifying your customer to understand the
business opportunity and identifying needs-based app op-
portunities. Where and how do customers live? What devices
or platforms do they currently use, and why? What motivates
their app usage, and in what context? What are their differenti-
ated expectations and mindset? What are whitespaces open for
innovation?
The simplest options here involve asking around—poll your
users, your potential users, your friends, and family about their
mobile app usage. You may even want to try posting a question
on Facebook or Twitter. But once you get some initial validation
you’re probably going to want to get some more sophisticated
data that that is more representative of the whole population.
For some general background and a “state of the market”, syn-
dicated research from market research firms can be very valuable
to provide detailed demographic and behavioural information.
For more targeted questions, (or prior to spending lots of money
on development) a custom study that takes a deeper look into
customer motivations is invaluable. You may even wish to con-
sider ethnographic research where customers are interviewed
and observed using their mobile devices and apps within their
day-to-day lives.

Market Research 18
Initial app development
Research goals: Providing a clear sense of the competitive
landscape and your app’s potential. How do consumers under­
stand and categorize apps within the current environment?
Which areas represent unmet needs, and which are saturated
with solutions? Does ad-supported, freemium, or paid content, or
some combination thereof make the most sense for your product,
and why?
Secondary research is usually your first step here. Dig deep
via Google searches, analyst reports, customer reviews and other
sources to get a grasp of what’s out there and customer sen-
timent. Then use quantitative (survey) and qualitative (focus
group) research to help you fill in the gaps and provide a richer
picture. Customers can be asked to provide, via interactive on-
line surveys, their awareness, perception, and categorization of
various mobile apps. They can describe their general needs, in-
cluding those that are not yet met. Focus group discussions can
then take these general findings into a dynamic conversation
with a trained moderator in which the underlying motivations
for these categorizations and perceptions can be explored with
users.

Market Research 19
Research Key To Understanding Your Audience: Target Your Audi-
ence on Mobile but Don’t Target the “Mobile Consumer”

Which of the following things do you do regularly on your

mobile phone?

QR or Barcodes
Total Sample 10%
Males 12%
Females 8%
13–17 6%
18–24 12%
25–34 16%
35–44 11%
45–54 7%
55–64 3%

Local News
Total Sample 3%
Males 3%
Females 3%
13–17 3%
18–24 3%
25–34 3%
35–44 3%
45–54 3%
55–64 3%

Total Sample of In-Store = 7%, Coupons = 11%, Movie Info = 18%,

Daily Deals = 13%.
Base: Total sample, N=4,000 / © 2011 Frank N. Magid Associates, Inc.

Market Research 20
Deployment
Research goals: Understanding consumer needs and how to
communicate the benefits and features of your product. What
will customers expect from your app, and how does your mes-
saging impact these expectations? How do they find out about
your apps and what are the key purchase, download, and usage
drivers? Are there any cross-platform opportunities that can be
leveraged?
This more complex customer behavior is often explored
through focus groups. Participants come together in a research
facility and discuss general expectations, as well as potentially
react to and provide feedback for a number of test descriptions
of your mobile app that might be used in marketing and com-
munication efforts. Through in-depth discussion with a trained
moderator, these groups can uncover customer expectations and
investigate how messaging impacts their ultimate perception of
your offerings—and how likely they are to download, use, and
promote.

Iterative improvement
Research goals: Reveals how customers actually use your app
(when, where, for how long, what do they use the app for are
doing the most?) so that you can better facilitate and ex-
ploit their behavior with targeted monetization and content
opportunities. Are users distracted by unforeseen usability or
technical considerations, and how can these be mitigated? How
might a consumer loyalty or cross-app promotional program be
implemented?

? ?
?

21
 User testing, in which one-on-one sessions with actual and
prospective customers interact with your app in a guided ex-
perience with a trained moderator, allow you to see what users
actually do—as opposed to what you intended them to do.
By asking participants to use the app in real-time to achieve
particular tasks or seek out specific information, user-testing
research often uncovers a disconnect between the perspective
of the expert app developers and the more naïve app users.
Users don’t always communicate exactly what they see, so you
can even combine this with neuromarketing techniques such
as galvanic skin response and eye tracking to provide physical
correlates to communicated responses for an even more compre-
hensive understanding.

Information that can’t be found

Information from carriers/operators is still a black hole for most
developers today. There are some legitimate privacy and security
issues so operators use extreme caution on letting their data
out of their hands. The fact is however, that most operators just
haven’t figured out how to do it yet.
Some services are starting to use traditional market data
(postal codes, census data, etc.) in combination with location
and cell triangulation to attempt to dentify income levels and
buying behaviour, but mobile is providing more often than not,
that it can’t be relied on to follow traditional models.

22
Who is my competition?
According to the latest WIP Survey, 60% of developers were
creating Consumer Apps; 20% were creating for a number of seg-
ments, only 4% were creating Enterprise Apps, and a negligible
number of developers were creating apps for brands. As you do
your market research, it is important to know who your competi-
tion is as well as who your customers are so that you can spot
the best opportunity for your business.

Device and Technology Choices

We suggest you get a copy of the Developer’s Guide to the Galaxy
and review your options for device and technology choices.
However, be mindful of the changes in the marketplace. Did you
know that…

—— Over 40% of iPads are going into the Enterprise, and

according to some reports, 80% of the Fortune 100 are
using tablets?
—— The Barnes and Noble Nook, an Android Platform, claims
that developers are realizing 10x or more revenue per apps
than in other stores.
—— Car manufacturers are coming out with their own in car
platforms, many based on Android?
—— As of March 2011, over half of U.S. consumers carry a
Smartphone, and 90% of them say they use their device
every single day. (As a point of comparison, it’s often
difficult to get 90% of respondents to admit to eating
food every day!)

23
The point is that as a developer, in addition to looking at the
major platforms, you should also consider the less obvious
choices because they could be a strong business opportunity
for you.

Developer quote: “Don’t start looking at yacht catalogues too soon!

I love the fact that there’s probably been about 15B spent on making
apps, if your average app costs 30k USD, BUT only 2.8B paid out by
app to developers… Mind the gap!”

How to Find Beta Testers

Do it on the cheap (but unfortunately not for free). You can try
to use friends and family, but unfortunately with testing, you
get what you pay for. However, with a modest payment per tes-
ter, you can accomplishment much. Using low cost advertising
for talent (Craigslist in the US), you can recruit a panel quickly.
Determine the demographics you want, such as: Age range, gen-
der, experience, type of device, rate plan, etc. Don’t make it too
exclusionary, but definitely spell out the users that you can’t ac-
cept. Then you can cull the respondents by the criteria to test:
users with diverse or specific carriers, different OS’s (iPhones,
Android, Symbian, Blackberry), specific models, etc. Lastly offer
the remuneration and requirement.
For example: Testers needed for 1 hour during the week of
Mar 1–5, to try our New Smartphone App. We are located on
Market St. in downtown SF. Will pay $15 and provide snacks.
Must have an Android smartphone with an active data plan, be
20–25 years old and have experience playing word games on
your mobile device. Email us now at: [email protected] with your
contact info (mobile number, e-mail and best times to reach
you), your type of phone and the mobile carrier you use. Thanks!

Market Research 24
Screen them over the phone and schedule or reject. Realize that
25% of those scheduled will flake out and not show, so overbook
to reach your tester quantity goal. With this approach, you get
to see the users using the App, their reactions, where they get
stuck, can question them on their thoughts, and get feedback
on proposed fixes/changes.
Another low cost approach is through crowd-sourced testing.
With this method, you determine the same demographics and
criteria needed for the test. But a company has a panel of quali-
fied users who will take on your testing project. The benefit is
that you can do testing over time. This allows for a feedback
loop as you refine your App.

Market Research 25
Merchandising Your App For Discoverability 26
MERCHANDISING YOUR APP
FOR DISCOVERABILITY
So, you’ve developed a great app, now what?! Just because
you’ve developed an amazing product doesn’t mean that it’ll
be easy to find a large and enthusiastic user base overnight.
The next critical steps in the go-to-market process are all about
positioning your app for a successful relationship with its users.
That means ”merchandising“, which is the art of promoting and
branding your app for a successful launch and ultimately user
adoption and retention.

What’s in a Name?
How you brand your app is one of the most crucial contributors
to the success of how the Universe embraces your app. Why?
Because this is your chance to capture the attention of your au-
dience in one neo-second. Depending on who you are trying to
reach, this is how you instantly express the tone and personality
of your app. Here are some quick examples:

—— Does your app propose a new way to do business—if so,

make the name super catchy?
People don’t “search” for something, they “Google it”…
—— Does your app solve a problem?
Videosurf—this name does a good job of letting you know
in one word what it does for you…or problem it solves
—— Is your app something fun that needs to be memorable?
“Angry Birds” is entertaining and easy to refer colleagues
and friends to check out

Merchandising Your App For Discoverability 27

Coming up with a catchy name and tag line for your company
or product may not be easy, but it’s an important part of kick
starting your go-to-market success.
Picking the wrong name or tag line can ruin an otherwise
successful product launch. Take the classic marketing example
of GM’s launch of the Chevrolet Nova. GM was baffled by why
the Nova wasn’t selling in Spanish speaking countries until they
realized that “No va” means “doesn’t go” in Spanish. Then there
was the 1970’s American computer company Wang, which tried
to implement the tag line “Wang Cares” to British consumers.
Unsurprisingly, its similarity to the word “wankers” ensured
its immediate failure. There are countless cautionary stories
like these of cross-cultural marketing blunders. So, before you
launch with a name or tag line, it’s a good idea to first get feed-
back from at least a few people in each of your target markets.
Another mistake is giving your product or company a name
that is difficult to say or spell. If you want people to learn more
about your company or product, it’s important to pick a name
that sticks and can be easily repeated.
It’s also advisable to pick a catchy name that corresponds
to an available URL and that will be easy to find in an Internet
search. If you name your product something common like “The”,
“It”, “Happy”, etc. finding an available domain and doing SEO
will cause ongoing problems.
Whatever you decide to name your company or application,
ensure that it allows you some flexibility if your product road
map changes. For example, if your first app is a news app, you
might not want to name your company “News Apps” in case
your second or third app winds up being an app from a differ-
ent genre.
Do some research as to how people are already searching for
content similar to yours and what they are searching for. This
will give you some insight into words that are already identified
with your idea.
Merchandising Your App For Discoverability 28
 Lastly, never use another company’s name as part of your
name. For example, if your company sells apps on Apples App
Store, don’t call it “Apple Apps”. Not only will doing that likely
put you in legal hot water, it will also make it hard for you to
establish a stand-alone brand of your own.

Branding and Collateral

Creating a strong brand and supporting collateral is an impor-
tant part of making a good impression on prospective users.
First impressions matter, so, it’s worth investing in a designer
who can add polish not only to your product and website but
also to your other marketing materials.
Do I really need collateral? Depending on how green and eco-
friendly you strive to be, paper collateral may not be necessary.
However, you definitely need a place to convey your message,
a web page will do, preferably including a link to a .pdf that
people can easily download or refer others to—to help boost
your reach.

Merchandising Your App For Discoverability 29

 Aside from a website, you may want consider creating the
following collateral to support your marketing efforts:

—— Business Cards
—— eStationary
—— Logo
—— Power Point template (to ensure consistency across your
company presentations)
—— Footer for your email
—— Template word document with your logo
—— Power Point introduction to your company and products
(particularly for investors/partners and/or if you’re a B2B
developer)
—— A one-sheet .pdf for each product (if you’re a B2B
developer)
—— Swag/give aways
—— Social media for promotion—a ppt for SlideShare, a hash
tag for Twitter or a YouTube Video

Merchandising Your App For Discoverability

Promotion
Making your app discoverable is key to distribution success.
Getting the word out about your new app is critical to User
acquisition.

Website
One way to ensure discoverability is to invest not only in your
apps but also in your website. Here are our top 5 tips for market-
ing on your website:

You never get a second chance to make a first impression.

If your site isn’t ready for prime time, don’t rush it. Claim your
domain, and park it—ideally with a brief description of your
forthcoming product and your contact details.
Test, test, test! Ask your friends and family what they think
about your website and other marketing assets, but remember,
they may not always give you an honest opinion. You’re more
likely to get an honest opinion from an unbiased 3rd party. Buy
a handful of $25 gift cards to Starbucks, Amazon, or iTunes as
“honorarium” incentives and put an ad out on Craigslist looking
for people who are willing to give you their opinion. Conduct
in-person interviews, or talk to people in your target markets
over Skype video chats about your logo options, marketing copy
options, and layout options for your site.

Don’t assume that because someone lands on your site that they
already know what your product does.
Plenty of mobile start-ups fail to effectively explain either what
their product does or why anyone should use it.

—— Make sure to include an “about us” page on your website.

—— Create a marketing pitch (no longer than a few lines)
that accurately and succinctly describes your product and
Merchandising Your App For Discoverability 31
 gets people excited about it. The initial pitch should be a
teaser that simultaneously describes the value you bring
and excites readers to learn more.
—— Post the pitch on your home and “about us” pages, and
use the pitch in your app descriptions on various app
stores.

Encourage virality of your product on your website and

in your app.

—— Include a link on your website to your apps on the various

app stores (this may not be possible for all app stores, so
if your app is on a store that doesn’t enable web linking,
you should still include a blurb about where your customer
can get your apps).
—— Post links to your company’s (and executive team’s) social
profiles, and encourage potential customers to engage
in conversations on your website and within your app (via
forums and social networks).
—— Suggest text for fans to share with their friends on social
networks and give them a way to share it (i.e. via social
plug-ins on your site and in your app).
—— Make it easy for people to cut and paste text from your
website—especially text that describes your product so
that they can share it with their friends via email or social
networks. Don’t use image files to display the text descrip-
tions of your company as this will make it difficult to cut
and paste.
—— Make sure to optimize your standard and mobile websites
for SEO. Buy keywords and drive users to discover your
mobile app through the web.

Merchandising Your App For Discoverability 32

—— Show users where they can download your app from your
website (i.e. Link to the various app stores where it is
available).
—— Cultivate a social networking presence that encourages
discoverability.

Triple check your spelling and grammar!

Always use spell checker! You wouldn’t believe how many spell-
ing and grammar mistakes we’ve seen in app and on developer
websites. Everyone makes spelling and grammar errors now and
then, but they shouldn’t occur in marketing copy. Seeing spell-
ing and grammar mistakes in marketing copy won’t encourage
potential customers to purchase your product. In fact, it’ll do
just the opposite.

Localization
Creating an app outside of your native language? Ask a native
speaker to review your website and app for grammar and cultural
appropriateness. No one expects someone’s second language to
be as good as their first, but customers expect that if they buy
a product in their native language that it will be easy to use. It
shouldn’t cost you much, and it’ll improve customer engagement.

Merchandising Your33
App For Discoverability 33
Advertising
Paid advertising is one of the more effective ways to get the
word out about your product. One of the best ways to advertise
is through other mobile apps because it’s easier to acquire mo-
bile users that are already engaged in a mobile experience on a
mobile platform that you support. See Mobile Advertising section

Co-Marketing
One of the least expensive ways of acquiring new users is to
work with other start-ups. Co-marketing with another company
is a great way of getting the word out to a new group of users
that may want to download your product.
When seeking a co-marketing partner, look for one that has
an established user base and a complimentary product to yours.
For example, if you develop a utility app that lets a user know
which apps are sucking battery life, you may want to partner
with a developer that makes an app has been optimized to con-
serve battery or another utility app that lets users know how
much data they’re using.
Co-marketing can been intense or light-weight, depending
on what works for both companies. Examples include:

—— Link exchanges (though these aren’t typically effective in

the mobile world)
—— User swaps (i.e. I’ll email 1,000 of my users about your
product if you email 1,000 of your users and tell them
about mine)
—— Ad swaps (i.e. I’ll give you 10,000 free impressions in ex-
change for getting a featured slot in your next newsletter)

Merchandising Your App For Discoverability 34

—— Co-sponsoring parties/events together
—— Mentions on each other’s blog
—— Shouts to each other on social networks

Whatever you decide to do, it’s advisable to document each

party’s commitments up-front in writing to ensure that there are
no misunderstandings during the execution phase.

Social Media Marketing

Cultivating a sense of community and an affinity to your brand
among your users is a key part of retention. Social media is a
great way to engage users with your brand. Having a Facebook
Page, a Twitter profile, or a LinkedIn group is great, but if you
don’t use it to engage your community of users, it’s worthless.
Have someone from your marketing team act as your com-
munity manager to cultivate users around your social profiles is
smart. If you’re a small start-up and can’t afford a dedicated re-
source for community management, it’s still possible to acquire
and retain users on social networks, just make an effort to put
new, relevant, and fun content on your social profiles as much as
possible. As well, be sure to support your partners and commu-
nity with “sharing”, “liking”, “retweeting” and “commenting“
on their posts.
The opportunities are booming and this area is relatively
new, so don’t be afraid to try new ways to connect with your
community! Here are a few best practice tips:

—— Hire a dedicated resource to handle your social network-

ing strategy and tactics (e.g. freelance will work as long
as the resource is dedicated) or allocate someone on your
team to manage your brand and message—this needs to
be considered part of your overall external communications
strategy.

Merchandising Your App For Discoverability 35

—— It’s crucial to remain fresh and current. The quickest way
to lose credibility is to keep outdated posts live and view-
able for the Universe to see.
—— Be sure your dedicated person is prepared to respond on
a daily basis, yes, including weekends as well as to probe
your followers/members by asking thought-provoking
questions, which generate interactive discussions and
friendly disagreements.
—— Always respond to both “positive” and “negative” com-
ments and reviews with prompt and professional acknow­
ledgement to your audience. How you respond to negative
comments can go a long way by thanking them for their
attention to detail, etc. and defending or correcting the
comment if needed with grace and neutrality.
—— Become the subject matter expert (SME) of your field by ­
providing newsworthy information to your audience.
Perhaps you post links to related technologies, tools, or
workshops/conferences, which your audience wouldn’t
want to miss. Strive to become the central pulse of your
industry.

Viral Optimization
Encourage users to share your app (from within the app experi-
ence) to their friends/family. Add some integrated options to
tweet or share the app on Facebook. This will provide a very
effective method of spreading the word about your app. Reward
users for sharing your app with others. Test which product strat-
egies work to increase virality and which don’t, and regularly
adjust your app to incorporate your findings.

36
Events and Tradeshows
Exhibiting independently at trade shows can be a huge time
and budget suck for start-ups. Between the cost of investing
in the construction of a booth, transporting that booth, travel
costs, and staffing, exhibiting at a large trade show can easily
cost $30,000.

Here are a few best practice tips:

—— Prior to investing your precious resources, time and bud-

get, find out from the organizer what their plans are for
pre-event, onsite, and post-event print and online com-
munications strategies. How many eyeballs do they reach?
In these materials, can you provide more information than
a company logo—perhaps a catchy active tagline as part
of the communications strategy?
—— Ask the organizer for a list of participants, sponsors and
profile of attendees who were involved the previous year
or two.

—— Who participated/exhibited last year?

—— How many people attended, including a breakdown of
the attendees by job role and demographic? This is
to ensure you are going to be reaching the appropriate
attendees.
—— If you exhibit, are you able to negotiate a speaking
slot or opportunity to participate in a panel or
un-panel so you generate maximum exposure at the
conference?
—— In addition to the exhibit space, are you able to parti­
cipate in a special programming segment? Perhaps
there’s a fast-pitch session or an app bar or a showcase
lounge dedicated to up and coming apps?

Merchandising Your App For Discoverability 37

For start-ups other cost effective ways of leveraging tradeshows
and industry events includ partnering, sponsoring, networking,
speaking and guerrilla marketing.

Partnering
Large companies that can afford to exhibit at trade shows of-
ten offer pods to their developer partners—either on a free or
subsidized basis. They need you to showcase their technology!
Motorola Mobility, Google, Microsoft, HP, major wireless opera-
tors and others in the mobile industry frequently have part-
ners in their booths at large trade shows. The person at your
company that leads business development should actively look
for opportunities to leverage the booth space of your partners,
where possible.

Sponsorship
There are tons of opportunities to sponsor things at trade
shows, but like exhibiting, sponsorship is often expensive, and
the ROI is often not immediately clear. Sometimes, it’s just as
cost effective to sponsor an event (which typically gives you
free event tickets) as it is to get a ton of your team into a show
on full-priced tickets.
If you’re considering sponsorship, look for actionable oppor-
tunities to get your company and product name in front of your
target audience, and always try to get the organizers to throw
in a few extras for free. For example, if you sponsor the lanyard
at an event, make sure it’s got your URL or something about
your product written on it so that the people wearing it know
where to go to learn more. If you’re sponsoring a breakfast,
make sure you get all of the email addresses of the attendees
and email them after the show. Also try to get the organizers
of the event to give you some extra tickets to the show’s event
for VIPs (where relevant), so that your execs can network with
industry influencers.
Merchandising Your App For Discoverability 38
Networking
The most cost effective way to make the most of an event or
trade show is to spend time networking and planning meetings/
parties in advance. Leverage your online social networking pre­
sence to let fans, colleagues know on Twitter, Facebook, and
LinkedIn that you’ll be at the show and direct folks back to a
meeting scheduler on your website or email address to arrange
meetings. Also find out which networking events, parties, etc.
will be going on at the show and get your name (and colleagues’
names) on the RSVP list so that you can split up and meet new
people at the show.
Based on the number of opportunities you identify in ad-
vance of the show, you can determine how many people from
your team should go to the event. Depending on the type and
size of your business, it can often make sense to send more than
one person to big shows like Mobile World Congress, SXSW, and
CES; while at smaller shows, one person may be effective.

Guerrilla Marketing
With a little creativity, you can maximize your trade show/event
presence through guerrilla marketing which tends to be low-
cost and unconventional ideas. If you’re considering launching
a guerrilla marketing campaign:
Make sure it is relevant to your product or service, ties in well
to your other marketing efforts, and has a clear call to action.

39
 Consider the community, and the environment, and don’t do
anything that could harm either. A good example of guerrilla
marketing gone wrong occurred at 2011’s Game Developer Con-
ference in San Francisco, California, when a large video game
publisher, released hundreds of red balloons over San Francisco
—each attached to a promotional flier for its new game. Tons
of balloons wound up floating in the San Francisco bay, causing
outrage among residents and the California Department for Fish
and Game.
Many tradeshows/events prohibit guerrilla marketing from
taking place on site, so you may need to take your campaign to
the streets nearby during a lunch break or before/after the show
starts—away from the show floor.

Get Featured!
Getting featured in app stores is one of the best ways to in-
crease app discoverability, but it’s not easy. All of the major ap-
plication stores have featured sections, and the spots are highly
coveted because they drive downloads. If you want to see your
app in these sections, it’s important to get the word out to the
decision makers. Attend developer events and meet the devel-
oper advocates/developer relations/ business development folks
at the various OEMs, Operators, and OS providers. When you’re
getting ready to launch your app, ask these people for feed-
back and incorporate their ideas, where relevant. Let them know
when you’re getting ready to launch and ask them to consider
your app for featured placement. There are no guarantees that
you’ll get featured by doing this, but if your app is great, and
the right people know about it, the better your chance of get-
ting featured.

40
Public Relations
Getting the press to write about you is a great way of raising
discoverability of your apps, but press attention is difficult to
garner without help. Consider hiring a well-respected PR consul-
tant. PR isn’t cheap, and you get what you pay for. A PR con-
sultant will usually be less expensive than a firm, but they may
be more resource constrained. Make sure to define expectations
and performance goals with your firm or consultant up front.
Get a realistic idea of the type of coverage they expect to get
for you and the time-line for success. Ask them for references
from comparable companies, and call their references to find out
about their experiences. When you hire a PR firm, make sure to
manage them effectively. Know up front who will be doing the
work for you, and have someone from your team manage that
person as closely as though they were in an in-house employee.
Lastly, keep in mind that even if you’ve got the best PR firm
in the world, if your product isn’t exciting, press won’t bite.
So, listen to the feedback from your PR firm. If the press isn’t
receptive, it’s likely consumers won’t be either, and it could be
time to pivot.

Don’t be afraid to hire a marketing consultant.

There are plenty of great social media marketing and copy writ-
ing consultants who can help you with your marketing strategy,
hone your pitch or simply review and tighten up your marketing
copy.
If you’re worried about the costs of hiring a marketing con-
sultant, step back and evaluate how much money you stand to
lose by not investing in marketing.
Hire a consultant who knows what they’re doing. Ask friends
and your investors for recommendations, ask candidates for re-
ferrals and examples of past work, and carefully evaluate your
prospective consultants through interviews.

Merchandising Your App For Discoverability 41

Business Development 42
BUSINESS DEVELOPMENT
Meeting the Right Contacts
It’s all about who you know. Really! You can spend tons of time
on building and tweaking your apps, but getting to know the
right people will make the difference in how quickly you get to
market and succeed.

Network with a Purpose

As mentioned earlier having a plan is vital to success, especially
when investing time to meet people you need for your business
to succeed. It is all too easy to aim at someone (or a company),
then while getting ready to pull the trigger see someone else
that could be even better, so you aim there instead. And right
when you are about to move towards them, you think of some-
one else that is certainly better, so you re-aim at them. Before
you know it, you haven’t accomplished a thing and are spinning
in circles. Everyone wants to help you. Some of these people
can help, but only a few will follow through. Picking the “right
targets” will get your App to the next level, and is critical to
maximizing your time in working with partners.
Have a very clear objective in mind. What do you want
to accomplish in an interaction with prospective partners,
whether for: distribution, joint development, co-marketing, on-
boarding? Even if you don’t entirely know in advance what the
ultimate synergy may be, determine what you want to learn,
propose, advance or establish when you get that meeting. Keep
that objective very clear in your head, and consistent in your
communications. Remember that your number one goal is to get
an introduction/conversation.

Business Development 43
 Identify the group or company you need. Make a list of the
targets that you believe are necessary to advance your App’s
agenda towards market success. If your list is more than 15
targets, narrow it down to the most vital 15.
Identify the Who. Who are the decision makers or key influ-
encers? Find the people that matter, such as the ones issuing
press releases, getting quotes in articles, the subject of blogs
and stories, organizers of events or meetings, and known to
“make things happen”. If not, look up the title you need on
their company website and call them (and/or punch an e-mail
through if that fails).

The Art of Getting an Introduction

Find a way to meet them. Once you decided on your target,
how do you meet them? It may feel awkward to get in people’s
faces, but it is much easier than you think, if you

1. know what you want to accomplish,

2. do a little research,
3. reach out; and
4. connect on the synergistic benefit to you both.

Who do you know that knows them, the group or the com-
pany? LinkedIn is the greatest for this. Your network is also
great, because now you can ask for the exact help you need of
your friends, acquaintances and colleagues. A warm introduction
from a friend is ideal if you can get it.
Go to where your targets are. Make your luck! Industry and
developer conferences are rich with the targets you want, and
now you are hunting specific groups and people with a clear
purpose. The fact that you will meet some of your targets by
design or accident isn’t luck, if you weren’t there, it could never
have happened.

Business Development 44
 Be brave and interesting. Start with a goal of meeting just
two people, and you’ll be amazed at how the introductions grow
from there. Get an introduction/conversation to start a relation-
ship and or propose something of interest to someone who you
just met at a conference. Whether meeting in person, on the
phone or in writing, find a way to connect as the most impor-
tant step in the business development process.
Manage your Pipeline. Lastly, as you make your way through
the list of 15, add a new one to the list for each one you start a
dialogue with. This is your pipeline.

Business Development 45
Distribution 46
DISTRIBUTION
Appstores
Appstores are a great way to reach potential customers and users
of your apps: they offer relatively easy reach to a huge range of
people, and handle the billing and delivery of your products. But
while they may provide a nice storefront, they don’t always do
a lot to help market your apps, and competition in the biggest
stores gets more and more difficult as the number of apps they
hold continues to increase. Let’s take a look at some of the top
appstores:

Appstore Platform Daily Downloads Alternatives

GetJar, Sam-
sung, Motorola,
Android Market Android > 50 million
Amazon and 50+
others

Apple iTunes Cydia (Jailbroken

iOS > 33 million
Appstore iPhones)

Symbian, Qt,
Nokia Store > 11 million GetJar
Widget, Java

Blackberry App
BlackBerry > 3 million Crackberry
World

Java, Symbian, Appia, Handster

GetJar > 2 million
Android, widget (Opera), Nexva

Distribution 47
 The huge number of downloads these stores drive make them
very attractive; the flipside is the sheer number of apps they
have, meaning the fight for user attention in them can be very
difficult. When choosing which appstores (or even which plat-
forms) to work on, consider this fight. For instance, a research-
4market study from Q2 2011 showed that the Nokia Ovi Store,
Windows Marketplace and BlackBerry App World deliver a higher
average number of downloads per app than the iTunes Appstore
and Android Market; conversely, the iTunes App Store delivers
far higher profits than other stores.

Choosing Your Appstores

Submitting an application to an appstore is often times more
difficult and time-consuming than you’d expect, and this burden,
added to the ongoing management of each submission, means
it’s likely that you will want to choose a small number of stores
to work with, rather trying to hit most of the 120+ that exist.
So how should you choose? The following three types of stores
are a good place to start.
Ch e!
oo
m

se

48
 Major Platform Stores—These remain the most likely place
users will go looking for apps, so even if your outside marketing
may focus on other stores, it’s worth putting your apps in these.
Niche Market Stores— Does your app have a strong draw to
a particular market niche, based on geography, type of content,
or even device type? For instance, if you have an app for Android
tablets, there are stores that focus on them; local stores such
as Androidpit in Germany have strong user bases; if your app
appeals to bookworms, you might want to check out the Barnes
and Noble Nook store; and so on. These smaller stores often
attract more dedicated users—and offer up a smaller pool of
applications and have stronger marketing outreach.
Operator Stores—Many mobile operators now support their
own appstores, which can offer a few benefits. Many of them
support carrier billing, which has been shown to have a dramatic
increase on app sales. Others can offer marketing support, such
as featured placement, advertising on operator web sites and
other collateral, and more. However, working with these stores
and operators can often be a time-consuming and slow-moving
process, so it definitely is a risk-reward scenario. Another good
angle here is to look outside your home market: many operators
from smaller markets are now actively recruiting applications for
their stores, and are willing to help with converting them to local
languages and marketing them to their user base.

Multi-store vs. Single-Store Strategy

Many developers take only a single-store strategy, but many
successful developers work with multiple stores to maximize
their exposure and use different business models (such as ad-
supported vs. paid download) to maximize their revenues. Here
are some things to consider about a multi-store vs. single-store
strategy:

Distribution 49
Multi-store Single-store

The main platform appstores

90%+ of smartphone users only
can have serious limitations,
use a single appstore, which tends
such as payment mechanisms,
to be the platform appstore ship-
penetration in certain countries,
ping with the phone
content guidelines.

Your own website can bring you

Smaller stores give you more more traffic than appstores
visibility options (featured app). (especially if you have a well-
known brand)

Many smaller appstores scrape data

Smaller stores are more social
from large stores, so your app may
media friendly than large ones.
already be there.

Operators’ stores have notorious­ For non-niche content, operator

ly strict content guidelines and or platform stores may offer enough
can be difficult to get in, parti­ exposure to not justify the extra
cularly for some types of apps. effort of a multi-store strategy.

Some operators’ stores have easier

Smaller stores may offer a wider
billing processes—such as direct
range of payment or business
billing to a user’s mobile account
model options, or be available
—leading to higher conversion
in many countries.
rates.

Some developers report that

50% of their Android revenues iPhone developers only need
come from outside of Android 1 App Store.
Market.

Distribution 50
Which App Store?
“All of them” is the first answer that comes to mind. However,
the theory of “Being everywhere where a user might find your
App” is easier said than done. Considerations include:

—— the application App submittal process

—— App review process and criteria, ability to monetize
—— category crowding
—— revenue share and timing

Build a matrix of what you know to be your universe of App

Stores by what you think are important criteria in prioritizing
your App Submittals. A good way to understand the dyna­mics for
each Store is to consult (directly, via blogs or forums) with de-
veloper peers about their experiences. This will help you gauge
each of the mitigating factors in setting up your priorities.
A fictional example is given on the next page in which a simple
scoring system is used. (You should probably weight each of the
criteria based on your own situation.) The higher the score the
better (1 = low or difficult, 2 = ok, 3 = high or favorable).

51
 Ge er r y
AT d
on

kb
oi

ar
e
az

&T
dr

tJ
pl

ac
Am

An
Ap

Bl
Public Awareness
of Storebada
Number of Users

Number of
Competitors
Monetization Methods

Revenue Share

Store’s UI and
Functionality
Application Process

Time to Process
(weeks?)
Stringent Content
Review
Diligence in
App Testing

Total-Score 21 18 22 22 18 19

The higher the score the better (1 = low or difficult, 2 = ok, 3 = high or favorable).

Marketing Alongside Appstores

Appstores are starting to look a bit like the content decks of
yesteryear, in that their top download charts play a huge role in
determining the winners and losers. Many developers approach
this like a lottery: they submit their app, then pray. Don’t be one
of them! You need a strategy to market your app and move up

Distribution 52
the charts. We’ve collected a lot of tips from developers about
how they had the most success in stores, and got a variety of
answers, but the common theme was that there was no silver
bullet, and you need to keep firing on all fronts.

Here were some of the best tips:

Make sure your app kicks ass. Get all the bugs out, since
bad reviews will hurt your chances of success. Get the UI right,
and make the app entertaining and a pleasure to use. Also,
make sure you’ve gotten a lot of user feedback before releasing
the app.
Hone your submissions. Get a nice icon for the store, and
make sure your screenshots look great. Work on your app’s de-
scription and carefully choose your keywords and categories.
Experiment with this over time so you can continually refine it.
Reviews can help. Reach out to bloggers, your local press
and other media to get attention and reviews for your app. Not
every site will deliver the eyeballs of Techcrunch, but everything
helps. Local press outlets often love to hear about apps from
local companies and developers, so don’t overlook them. Again,
if your app has niche appeal, reach out to the key bloggers and
media outlets in that niche.
Get good user reviews, and get them early. As noted above,
user reviews remain hugely important. Reach out to your friends
and family for reviews as soon as you upload, and regularly ask
your users to submit ratings and reviews to the appstores.
Build in social media to your app. Give your users a way
to help spread your app through posting to social networks and
sharing content.
Don’t rely on the appstore alone to bring you traffic. This
is probably the single most important point here. You can’t ex-
pect the appstore to market your app for you. Make sure you’re
driving traffic to your app through other means, including your
own website and social media.
Distribution 53
 Understand momentum. Many of the top download charts
are really based on momentum, rather than sheer number of
downloads. The charts look at the past 24 hours, week, or another
period of time in an attempt to remain fresh. This means that
getting a head of momentum is key to penetrating them. See the
“bursting technique” below for more details.

Marketing Within Appstores

If you rely on the appstore as a way to promote your app, you
have 5 options:

—— To be chosen for a discount

—— To be a new app
—— To be chosen as a staff favourite
—— To be on a top download chart
—— To be recommended by your friends (only available in
social stores)

The problem is that most of these aren’t sustainable—or even

predictable:
You can’t discount at all times! Even worse, if you do a free
app you cannot discount.
You can’t be new forever! Some developers have tried to
upload a new version every 6 weeks to always be displayed in
the “new” sections—but the loophole didn’t last long.
Like any “crush”, the staff pick can’t last forever! An app­
store’s staff can love you and feature you on the appstore, or in
TV. This is powerful, but it’s not sustainable. As soon as the ads
stop, so do the downloads.

Unless you make it to the top 20 or 200. This lead in the

charts can be sustainable, since the higher you are in the rank-
ings, the more downloads you get, which makes you higher in

Distribution 54
the charts, which gets you more downloads, and so on and so
on, until people get bored of your app.
Just like Google has a secret algorithm for search, every
single appstore out there has its own secret algorithm to deter-
mine your ranking. Lots of time has been spent trying to crack
these algorithms, and you’re welcome to try! Or you can make
use of the biggest finding from all of this work: the main factor
determining the rank across most app stores seems to be the
number of downloads in the previous 3 or so days (or similarly
short period of time).
This means one of the most common practices is to work
towards a big burst or spike in downloads over a few days, with
the aim of achieving extraordinary downloads for 3 days, then
waking up with a much-improved rank on the 4th.

Which leads us to the “bursting technique”, a method that can

involve several of the following points:

—— Discount your price (for paid apps) for a few days.

Note how big publishers such as EA and Gameloft do this
before Christmas to endure they’re at the top of the charts
when people open that new iPad or phone that Santa
brought.
—— Use Amazon’s free app of the day (or any similar
scheme). The download results have been average for
some developers, but it seems to be an effective way of
advertising that can often reach across platforms. For
instance, with the Amazon scheme, some developers say
their iPhone downloads have received a boost, despite
Amazon only serves up Android apps.
—— Advertise like crazy for 3 days on the web or on mobile,
rather than spreading advertising over a month.
—— Use your creativity to drive downloads en masse, such
as getting all your beta customers to download at once.
Distribution 55
Alternative Methods
When seeking alternate routes for distribution of an app, con-
sider the following:

Apple iOS Developer Enterprise Program

This program allows for distribution of proprietary, in-house
iOS applications to employees or members of an organization.
Example app categories ripe for distribution via Apple’s IDEP
include Business Intelligence, Lookup & Reference, Field Sales
& Service, Business Process, Collaboration, Training & Communi­
cations.
Additionally, consider leveraging an enterprise mobility part-
ner like AirWatch or MobileIron for simplifying distribution and
management of apps intended for internal distribution to em-
ployees or members of an organization. MDM (Mobile Device
Management) and MAM (Mobile Application Management) third-
party services can help simplify, manage, secure and audit the
distribution of native mobile applications and VPP redemption
codes in the enterprise.

Apple App Store Volume Purchase Program for Education

For Program Managers at qualified educational institutions, the
VPP (Volume Purchase Program) can simplify the acquisition;
purchase and redemption of unique application download codes
for end users such as students, teachers, administrators, etc.
This program accommodates account-based Volume Vouchers
as well as credit card/PCard use. http://www.apple.com/itunes/
education/

Apple App Store Volume Purchasing Program for Business

(U.S. only)
For Program Managers at enrolled and approved organizations,
the VPP (Volume Purchase Program) can simplify the acquisi-
Distribution 56
tion, purchase and redemption of unique application download
codes for the workforce. It also allows for purchase of custom
B2B apps built by third-party developers tailored to the specific
needs of the organization. http://www.apple.com/business/vpp/

Android—Installing from Unknown Sources

Users can opt-in to allow installation of non-Market applications
from within their device settings. If a user tries to install an ap-
plication received via distribution outside of a Market (e.g. via
SD card, QR code link, Dropbox link or direct URL), they will be
prompted to adjust their settings.

Your own Site

There are several white label options available now where you
can have your own app store on your own site. The tools offer
the functionality of a full store for a customer to download and
pay for your app.

Pre-loaded Apps
Apps that come preloaded on devices is still the Holy Grail for
getting discovered and gaining traction with your app. Unfor-
tunately it is very hard to do, so you shouldn’t put all of your
energy hoping for this one! But the best way to make this hap-
pen is to join the Developer Programs of the device or operators
and get to know the people, as they ultimately will make the
decision. You will need to make sure your app has good traction
in the market, or you are a proven team who knows how to make
that happen. In the end, they will make the decision based on
how well they think you will help sell their device or network
time.

Distribution 57
58 Business Models 58
BUSINESS MODELS
The Many Purposes of Apps
Not all apps are apps! What? It’s true, apps are built for many
purposes besides selling the application itself. Note too that
a business model is not a revenue model, rather the revenue
model you choose is a subset of your business model—see more
on revenue models next.

Other app business models include:

—— A resume tool to help get a job

—— A showcase for technology, that is then used to sell that
technology or get other developers to use it
—— A development service showcase, to showoff a mobile
development platform or tool
—— An app to deliver a real-world service (Take Nest’s free ap-
plication allows you to control your Nest thermostat from
anywhere in the world and thus helps sell Nest thermostats)
—— Branded app to sell a product or service to businesses or
consumers
—— A bundled app to sell a product or service for a partner
—— An app built for someone else
—— An app for customer care
—— An app for lead generation

Many of these have an indirect or no revenue model associated

with them.

Business Models 59
Working With Telecom Carriers
For mobile software developers, working with carriers is like
dancing with an 800 pound gorilla. The carriers move slower,
can kill you with a single blow, can’t change direction very
quickly, and aren’t exactly light on their feet. But they can also
lift you to great heights if you choreograph the moves just right.
Many developers can tell you war stories, and may scare you off
working with the carriers; and to a large extent, the stories are
probably true. Fewer can tell you success stories, but they’re out
there, too. And the successes are quite grand. There are reasons
that developers are steadily drawn to the carriers over and over
again: scale, distribution, and money. If you are to conduct your
business rationally instead of emotionally, you’ll need to weigh
the pros and cons of engaging with Telecom Carriers.

Pros
—— Massive distribution: Instead of picking up new users of
one thousand a week, a carrier deal can bring in thousands
per day.
—— Being pre-installed means the kind of exposure you could
never buy.
—— Multi-national carriers can give you wide distribution.
—— Once you get your first big carrier, the rest become more
receptive.
—— Carriers collect/have a lot of money. They are the place
where the customer money gets collected.
—— Carriers have billing systems that you can leverage.
—— Carriers have access to more user info, data, statuses, etc.
than is available to the developer just using standard app
store/platform SDKs.
—— Certain software just works better in partnership with a
carrier, for example if you use network LBS, call history
data, the SS7 network, or the voice channel.
Business Models 60
Cons
—— Carrier deals and biz dev will take a long, long time. Figure
9–12 months for the successful ones. Unsuccessful ones
take either shorter or longer!
—— Carriers don’t want to talk to you if you have “just an
app”. They only want to talk to developers with “game
changing” software…but then they are scared/reluctant/
slow to deploy “game changing” software.
—— They just may not “get it”.
—— If you win over a carrier delegate who now loves your
software, that person still needs to “sell” your solution
internally.
—— Being installed in “Bloatware” may tarnish your ratings
and reputation.
—— The faster path to market is usually the app stores, or it
could be direct to consumer via your assets (if you are a
recognized brand, ex: Nike). Beware this is “fast” to
market, but leaves you undiscovered and obscure buried in
the app store.

If you have a custom carrier deal, you will be sharing some por-
tion of your revenues with the carrier.
In conclusion, make a cold-blooded, logical choice about
whether to pursue carrier channels to market or not. Be aware
of the risk involved in your decision, and be prepared to handle
the challenges. Do not simply make a knee-jerk decision on your
path to market, and don’t just take advice. Frankly, we know
that some people just plain dislike the carriers, but be sure not
to let that emotion dominate your business decision. Yes there
are two paths you can go by, but in the long run, there’s still
time to change the road you’re on.

61
62 62
REVENUE MODELS
Now its time to talk about the best part—how to make money!

Pay to Play
This one is very easy to understand—charge the end-user for
downloading and installing your app. Then pay Apple or Google
their 30% cut and keep 70% of the gross revenue. A 30% cut
sounds like a lot, but when you consider that there’s basically
no upfront charge and that Apple and Google handle fulfillment
onto the devices as well as billing, it’s a pretty sweet deal.
In practice, most of the leading developers have found that
paid applications underperform other types of monetization.
Why? Typically the consumer aversion to paid apps prevents
them from trying the app. A notable exception to this is Angry
Birds, which still sells its flagship game for 99 cents.
If you’re going to charge upfront for your app, 99 cents is
a great price point. Sometimes, depending on the purpose of
the app, developers may set a far higher price point to connote
value, and then discount the app periodically or give it away for
free to encourage adoption by citing a “temporary discount”.

Freemium
Freemium means that it is free to download and obtain the basic
usage of the App, but if a user wants to have an even better
experience, they can pay for more. The goal for the App Developer
is to get as many users as possible to the pay threshold as
quickly as possible, by enticing them to go further with the
experience.

Revenue Models 63
The keys to success with a Freemium model are:

—— Provide enough in the Free Version of the Application to

build interest and stickiness for a period of time. A measure
of this to gauge user retention (whether they return again
to the application). If new users download it and never use
it again more than 60% of the time, you need to update
the core delivery until you reach that stickiness. If upon
a user’s initial experience they hit a pay threshold (i.e.:
pay to continue), they will most likely abandon and never
return. Enough needs to be available in the experience to
hold their interest.
—— The incentive to monetize/pay must be very clear. The user
must be able to state exactly what he will get for paying
and why he would do it. (Test groups will quickly validate
whether this proposition is clear.)
—— “In-App Payments are essential”. If the user has to leave
the Application to acquire the currency/points/ammuni-
tion/etc. it will fail. There is a need to pause the action
at the point the user wants to monetize, and return them
exactly to the point when they decided to pay.
—— Deliver on the promise. Users intrinsically evaluate the
ROI. If they pay, they should have an edge over those
who didn’t. For their money, are they getting more? Keep
tuning the offering(s) to reach higher levels of repeat
purchases per monetizing user.
—— Innovate and expand the experience. Don’t stop adding
layers/levels/rewards/etc. that can be had by continuing
to pay, or to pay more. (The higher up in the Hierarchy of
Needs your App can fulfill, the more people will pay.)

Revenue Models 64
Early in the days of the Apple AppStore, when the only moneti-
zation option was the sale of an app, many developers distrib-
uted a “lite” version for free, and encouraged users to upgrade
to the paid version with premium capabilities. This represents
a proven model—one which has been around since the 1980’s,
when developers used to give away floppy disks for free in order
to promote.

Free to Play
F2P is the hottest new category of direct monetization today
—play the game, or use the application for free, but advance
more quickly through the game by buying virtual goods.
This monetization model can incorporate other forms of mon-
etization for these virtual goods—in-app payment, offers, or
in-app advertising. Some publishers allow players or users to
purchase virtual goods in exchange for watching advertising,
and then the publishers get paid directly by the advertisers.

In-app Payment
The addition of in-app payments by Apple and Google added an
important monetization tool to the hands of developers. Funda-
mentally, it made Freemium a lot easier to implement. Rather
than requiring a separate “lite” app, developers could charge
inside the application itself to unlock more features and capa-
bilities.
This is particularly relevant because it makes it a lot easier
for consumers to upgrade and purchase these capabilities. With-
out the need to return to an app store to purchase a more high-
ly-featured app, conversion rates go up dramatically (end-users
are impatient and don’t like waiting). With in-app purchases,
consumers can instantly buy new features, content, and capa-
bilities. Instant gratification!
Revenue Models 65
 More interestingly, in-app payments allow for the delivery of
real-world services. If you deliver a real-world service, you can
take a credit card directly and avoid the 30% cut to Apple and
Google. A good example of this is Cherry—an iPhone app that
allows you to locate your car on a map, enter a credit card, and
get it washed on location within an hour. Uber is another great
example that allows consumers to enter their credit card and get
a point-to-point ride in a Town Car within minutes.

Subscriptions
The subscription model is quickly becoming one of the more
popular models for mobile applications, in the news/publishing
genre. Most of us are most familiar with subscriptions through
media like magazines and newspapers, and in the same way,
content based applications and service tools can really shine
through. Some of the most popular apps to use the subscription
model are Netflix, Basecamp, and Rdio (I should note that all
three examples are all successful web apps as well).

10
50

66
Here are a couple of tips if you’re thinking of going with a sub-
scription model:

1. K eep the App Fresh

As I mentioned before, for content based applications,
this is fairly easy. Each month, there should be new vide­
os, books, songs—whatever niche you’re in. However, if
you’re doing a service, having a reason for the customer
to justify them paying you every month is crucial.
Statistics have shown that consumers are willing to pay
on a recurring basis, but only if they see the value in it,
whether that’s on demand customer service, continual
feature releases, or new content.
2. Pay Close Attention the App Store Policies
Perhaps one of the biggest hurdles in the subscription
model is the complicated relationship between you
and the app store(s) you choose to partner with. Each
app store has their own unique policies when it comes
to revenue sharing, and some stores have rather strict
guidelines when it comes to subscriptions.
3. Partner with the Operators
What’s neat about the subscription model is it has been
proven as one of the wealthiest business models on the
planet—every mobile operator is using the subscription
model through cellular plans! What this also means for
developers is that building relationships with carriers
can lead to a lot of exposure for your app, and guaranteed
subscriptions.

Revenue Models 67
Mobile Advertising
Before you start—Mobile Advertising Cheatsheet:

CPA (Cost Per Action/Acquisition): CPC (Cost Per Click):

The price an advertiser pays for each The price an advertiser
desired action, such as sign up form pays for each click of
submissions or purchase of their their ad.
product. Also known as PPA, or Pay
Per Action.

CTR (Click-Through Rate): eCPM (Effective Cost Per Mille):

The percentage of clicks It is the amount of money you get
that an advertisement for every one thousand impressions
got in comparison to its of your ad and is the industry
overall impressions. standard of measurement in mobile
advertising.

Global Fill Rate: Location-Based

The global fill rate is the percentage Advertising:
of ad impressions that are populated Advertising that makes
by an ad. use of the location tech-
nology to provide more
relevant ads for the user.
Rich Media Advertising:
Rich media ads are a growing option
for creating more engagement with
your users. This can include an ani-
mated GIF, HTML5, Flash, 3D media,
and even full fledged videos.

Revenue Models 68
There are several business models to consider for mobile adver-
tising and over 200 companies:

Blind Networks
On one end of the spectrum is Blind Networks, which work on a
CPC basis (cost per click). These networks serve a high volume
of advertising largely from independent mobile app developers
and offer self-service tools to help advertisers track and opti-
mize campaigns. Blind networks include companies like AdMob,
InMobi, Madvertise, Adfonic, and BuzzCity.

Premium Ad Networks
On the other end of the spectrum are Premium Ad Networks
like Mobile Theory, YOC Group, Microsoft Mobile Advertising, Ad-
vertising.com, and others. These guys tend to focus mostly on
brand advertising CPM campaigns and therefore use a smaller
number of more premium publishers like big-ticket mobile sites,
mobile operators, and top-tier publishers. Premium networks
can also offer performance advertising (CPC), but the cost of
running these campaigns is typically much more expensive than
it would be on a blind ad network. Sometimes CPA (cost per ac-
tion/acquisition) is also available through Premium networks.

Premium Blind Networks

Premium blind networks fall somewhere in the middle of Blind
networks and Premium networks. They typically have a higher
number of premium publishers than blind networks and attract a
higher proportion of brand advertisers. Premium blind networks
usually offer both CPC advertising as well as CPM. The cost of
advertising on these networks varies significantly and is often
negotiable. Premium blind networks include Millennial Media,
Greystripe, Jumptap and others.

Revenue Models 69
Ad Exchange
An Ad Exchange enables cross-platform mobile application de-
velopers to maximise revenues with one embedded SDK that
serves ads from multiple ad providers. This category includes
companies like inneractive, Tapjoy, Mobclix, Smaato and Nex-
age. An Ad Exchange partners with global ad networks and local
premium agencies to provide developers a global coverage of lo-
cal-targeted ads. The exchange provides high fill rates, CTR and
eCPM. An exchange also offers developers and brands to directly
buy inventory from publishers to run their own campaigns on.
An App Monetization Exchange is the next generation of Ad
Exchanges offering multi-monetization streams on top of Display
and Rich Media ads, including Search, Hyper-Local and virtual
Currency, all integrated to a single robust SDK, which is offered
by companies like inneractive.

If you plan to manage mobile advertising on your own, don’t

put all of your eggs in one basket. Test different advertising
channels to see which work best before making too large of an
investment in any one network. If you invest the time in get-
ting to know folks at mobile ad networks, you should be able
to get a few test campaigns for free or at a reduced rate to trial
the network.
The costs of advertising can add up quickly, so it’s important
to time your investments carefully. Consider making a sizeable
investment in advertising when you launch your product to co-
incide with other promotional initiatives like public relations
and co-marketing, with the intention of getting a ton of users
trying your product from the outset. If your product is virally
optimized, you should be able to turn one user acquired through
advertising (user A) into many new users, assuming that user A
shares the app with his/her friends. When your growth trajecto-
ry slows, you can invest in another burst of advertising to keep

Revenue Models 70
up the growth momentum. Advertising in well-timed targeted
bursts is usually more effective than advertising a little bit each
day over a long period of time.

Benefits of Mobile Advertising

Ongoing Revenue: Once your mobile advertising systems are
set up, the basic formula is quite simple: more downloads equals
more traffic, which equals more impressions and clicks, which
means more revenue for you. Not one time revenue, but ongoing
cash that your integrated ads are generating for you 24 hours a
day, 7 days a week.
It’s Where the Money is: Distimo reported in the Android
Market, there have only been two paid apps to date with more
than half a million purchases. On the Apple App Store, the num-
bers are a little more optimistic with six paid apps generating
the same half a million downloads per a two month period in
United States. Projections for mobile advertising revenues are
growing at a faster rate than paid app revenues. Mobile is the
only industry in the world that you can create a product, offer
it for free and potentially make more money than if you charged
for it in the first place.

100

Revenue Models 71
 Added Value: Suffice to popular belief, if implemented well,
mobile advertising can actually provide an added value to us-
ers. Due to the nature of the mobile phone and its “Always On”
capabilities, receiving relevant and targeted ads within a mobile
app can actually contribute to the overall user experience. The
problem is when ads appear that are completely irrelevant and
or are displayed in a way that interferes with the core function-
alities of the app.

This means that selecting the right company for your mobile ad-
vertising efforts is a crucial step. You must ensure that your ads
can be targeted per location, per app category, and per content.
In addition, the ads you integrate must be included in the app
in a way that will not decrease the quality of the user experi-
ence, while maximizing clicks and increasing your revenue.
Look for companies that provide developers with an Ad
Placement Strategy, which ensure that your ads are placed and
integrated into your apps, so users can benefit from the extra
content you are providing them, and not the opposite.

Revenue Models 72
 Tips for Generating More Revenue From Mobile Advertising
Games Rule Mobile Advertising Statistics indicate that in terms
of CTR, the following categories are the top ones for developers:

—— Entertainment
—— Tools
—— Sports
—— Arcade and Action
—— News and Info
—— Brain and Puzzles
6,8%
5,9% 5,6%

4,2%
3,6%
2,4%

0,6% 0,5% 0,3%

0,2%

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Of the top 6, you can see that Entertainment, Arcade and

Action, and Brain and Puzzles can all fall under the broad cat-
egory of games. If your app is related to social networking or an
eBook app, other revenue models such as in-app purchases or
freemium may be more relevant.
High Global Fill Rate Doesn’t Guarantee Payment. One thing
to note is that high global fill rates may not always result in big
profits. Because there are restrictions in certain ad networks
Revenue Models 73
(the most common one being geography), networks may host
“house ads” that simply promote the advertising company you
are working with—and house-ads do not always generate revenue
so you need to be attentive and make sure the ads showing up
are ones that are generating revenue for you.
For example, if people who download your app are in the U.S,
they may see ads and generate clicks, but if someone in Asia or
Africa downloads the same app, they may either see an ad that
is completely irrelevant such as a house ad or no ad at all. Your
global fill rate won’t reflect that.

Focus on the Primary Countries

In terms of geographies, the following locations consistently
produce a relatively high CTR, and advertisers recognize the
quality of the clicks from the following locations by paying more
per click:

—— U.S
—— UK
—— Italy
—— Spain
—— South Africa
—— Australia
4,3%
3,4% 3,1%

1,7%
0,9%
0,5%
S o r ic e s
l ia

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al

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ra

A m St a
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Sp

Af
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Revenue Models 74
When designing and marketing your app, the above countries
should be taken into account. That includes in-app translations
for the relevant languages and targeted marketing campaigns in
those specific countries.

Find the Sweet Spot Between Most Visible and Least An-
noying. It goes without saying that you want to place your ads
in the optimal locations to generate maximum clicks. But while
you don’t want your ads to be missed, you also don’t want to
damage the user experience by placing the ads in annoying and
spammy locations.
If you can find a home for ads to be displayed in an unob-
trusive way, users will understand your decision to include ad-
vertising. Not only that, but if they are targeted appropriately,
users will actually click on them and think of the ads as added
value.
PS—if you are developing a game application, short timed ads
between levels is a great sweet spot, it is non-intrusive and you
can even use the entire screen!

Keep Your Ads Relevant. One of the main conflicts in mobile

advertising is, on the one hand, maximizing clicks and, on the
other, retaining your users. The best way to kill both these birds
is by using a stone otherwise known as precise targeting.
Relevance can be broken down into three main categories:
location, content, and the user. Today’s targeting capabili-
ties are endless. A fashion company can advertise their brand
to consumers who are using fashion apps. The same goes for
games, sports, entertainment, etc. You can also target by loca-
tion, which means a person in the vicinity of your location will
see an ad promoting your brand. When analyzing which advertis-
ing networks you want to partner with, make sure to look care-
fully at how each company keeps its advertisements relevant.

Revenue Models 75
Use Rich Media Ads to Excite Users. While static display ads
are still very effective, rich media ads—HTML 5, 3D, and even
video—can drastically multiply your CPM. Static display ads
generate a maximum of $3–4 eCPM, while it isn’t unheard of for
rich media ads to generate $20 eCPM.

Make the User Your Partner. Apple has made it very clear that
as a policy, incentivized downloads are a no-no. Still, the line
between encouraging a user to click and incentivizing them is
very fine. Given the fact that users get access to premium mo-
bile apps for free as a result of incorporated ads, it is in the
user’s best interest to keep clicking on the ads to keep the app
free. It is not uncommon for developers to remind users of this.
You can include a sentence above your ad reminding the user
that they are your partner in keeping the app free, and that they
can help by clicking on relevant ads they find interesting. As
long as you are honest about it, you will find that the responses
are usually positive.
As an added bonus, it also gives users a sense of community
in knowing that they are contributing to making the app better!

Delay the “Skip” button. This may appear counter-intuitive

for some developers, but the suggestion here is that you add
a countdown button to the bottom of your ad and delay the
“Skip” button by a few seconds. When presented with the option
of clicking a skip button, the majority of users will, due to the
clear call to action.
Now, you should definitely provide the user with a way to
bypass ads if they choose to, but there is no need to have the
button show up immediately. Keep in mind that your users could
actually benefit from an ad they see through your app, but they
intuitively skip it due to the design of the skip button. Delaying
an ad by a couple seconds won’t hurt anybody, but it may be
beneficial to both users and developers.
Revenue Models 76
77
78 Measuring Customer Engagement 78
MEASURING CUSTOMER
ENGAGEMENT
Why Bother?
Operating without analytics, could be compared to driving a
car without a dashboard. Analytics give you the opportunity to
steer your business. They help you understand what is working
and what is not. Analytics are the facts you can bring with you
to meetings with your stakeholders.

Caution: The amount of analytic data captured by a mobile

app during peak periods can bring your servers down.
Analytics capture from live production apps, should have the
ability to be throttled or shut off—in real time by your
operations staff—if your analytics are slowing app response
time during a peak or holiday season.

How to Get It
How to insert analytics into your app will depend on the ar-
chitecture of your app. Android and Web apps can use the free
service of Google Analytics and get 90% of the data needed to
make decisions. Installing Google Analytics is easy, free, and
should be done at the onset of the project.
Visit http://analytics.google.com for more information.

79
Here is an example of the script Google will guide you to insert:

<script type=”text/javascript”>
var _gaq = _gaq || [];
_gaq.push([‘_setAccount’, ‘UA-nnnnnnn-6’]);
_gaq.push([‘_trackPageview’]);
(function() {
var ga = document.createElement(‘script’);
ga.type = ‘text/javascript’;
ga.async = true;
ga.src = (‘https:’ ==
document.location.protocol ?
‘https://ssl’ : ‘http://www’) +
‘.google-analytics.com/ga.js’;
var s = document.getElementsByTagName
(‘script’)[0];
s.parentNode.insertBefore(ga, s);
})();
</script>

Some native apps may want to drop in the libraries of an analytics

or mobile advertising company, like these:

Analytic Toolkits
—— Flurry
—— TapJoy
—— MobClicks
—— Appclicks
—— Pinch Media
—— Google Analytics (Android and Web Apps)

Measuring Customer Engagement 80

App Analytics
Focus on collecting the analytics that will help in making deci-
sions and improving your app. You may wish to know the lan-
guages of your users, the navigation flow through the app, the
pages/tabs where users spend the most time.
These analytics can be used by user interface designers to
streamline the app, or cause more exposure for revenue genera-
tors, or decide which languages to support.

A/B Testing
A/B testing is a great way to tune your marketing campaign.
Not sure if the button should be green or yellow? Briefly try it
both ways and see which one works better. This is called A/B
testing and can really lead to higher success rates in apps.

Marketing URL Analytics

Using analytics on short URLs to test marketing campaigns.
Those short URLs like bit.ly—give you two benefits: 1) a short-
er/tweetable link, and 2) analytics about click through. Try this
cool experiment the next time you are running a tweet cam-
paign:

1. Create two different short URLs.

2. Have you and an associate both tweet the URL.
3. The next day, see which of you had a better click
through rate, by comparing the analytics.

=
2x 2x

81
82 Raising Money 82
RAISING MONEY
Finding money is a lot like dating—it take numerous first dates
to find a true match. To be successful you need to know exactly
what you are looking for and what the investor is looking for in
an investment. Don’t waste your time going to a VC with what
should be a “friends and family” round or an angel investment.
Here are some guidelines that will save you time and hopefully
get your venture funded.

It’s important to consider the Mobile fundraising environment:

Value add investors—Mobile startups are unique in a num-
ber of ways. While the cost of capital to build a mobile software
company is at an all time low, the ecosystem complexity and
marketing dollars to build a long term scalable business should
not be underestimated. Find an investor that truly knows mo-
bile, understands your value proposition and the hurdles your
business needs to overcome. This will pay more dividends in the
long run than getting a slightly higher valuation today.
Funding environment maturing—2011 was a year of frothy
valuations and 2012 will continue to be a good fundraising en-
vironment but investors will expect more. VC’s have placed a
number of bets in various mobile segments and are watching to
make sure these companies are making progress. As you fund­
raise, expect to be asked tougher questions around traction,
adoption, usage, and monetization plans.

Raising Money 83
 Raise enough money—Keep in mind that one of the cardinal
job requirements of a founding team is to not run out of cash. In
today’s uncertain economy, it’s important to reflect on that. Giv-
ing up equity is sometimes painful but being caught in no man’s
land when your funding runs out is worse. Startups sometimes
raise rounds that are too small to get to the next proof point in
their business and then have to raise additional money without
enough business or product traction to warrant the next step up
in valuation. Understand what metrics your business is going to
need to hit at the next funding milestone and make sure you
raise enough today for tomorrow.

What Do You Need Before You Approach

Your First Investor?
Regardless of which avenue you take for your funding you will
need to develop three key documents to help you communicate
your idea and also to clarify your thinking. The three documents
needed are:
A Power Point Presentation: This will be the presentation
you will give to your potential investors. This power point should
be approximately 12 pages and should include the following:
your company’s vision, the pain or void in the market, descrip-
tion of your current product, brief product roadmap, timeline of
key milestones, financials, a description of your competitors and
the size and growth of the market. One of the key elements here
is that your logic is tight, that all points reconcile and make
sense—this is where investors will test you the most.

Raising Money 84
 An Executive Summary: This is a word document 1–2 pages
long that can be sent if a meeting cannot be obtained. It will
have the same elements as your power point but can stand on
its own without the verbal overlay. The key is to remember this
is not meant to close the investor but to show them it is worth
an hour of their time to see you in person and hear what you
have to say.
The Financial Plan: The Financial Plan is a key component
for your investors. It is not as much of a test of your accounting
skills as it is of your overall plan. When you think about it, ev-
erything ends up in this document, such as: staffing plans, de-
velopment costs, marketing plans, and sales goals. The assump-
tions made in this plan are crucial to its success. It’s here that
great presentations can fall apart. For example, we have seen a
company present a $100 CPM with a 100% Fill Rate for their ad-
vertising inventory which is basic, un-segmented and scattered
across the world—perhaps a $1–$2 eCPM might have been more
realistic. Lay out all your assumptions and find the real ranges
in the market. Use this information to explain why you are high
or low in that range. Remember, this is not just about account-
ing. Your financial plan demonstrates how you think about your
business and whether or not your goals are realistic.

Who Do You Approach?

With these three documents under your belt, there are several
different groups to approach. Who you approach is all about
how much you need and what the model of your business is.
Listed below are summaries of these groups and why you might
approach them.

85
The Venture Capitalist:
Let’s start with the VCs. Mainstream VCs usually look for at least
10X their series A, or first round capital investment. This means
that if they invest $3M in a series A, they want to make sure
they have a clear path after dilution and set backs of at least
getting back $30M. Perhaps the most import item in consider-
ing whether a VC is right for your business is what VCs call
“average check size”. This is the average size that VCs write.
Most mainstream VCs will probably say $2–4M. While VCs always
have exceptions, the best strategy would be to look for that fit
rather than bet on the exception. For instance, if you are look-
ing for $200,000, you best odds are trying for an angel investor
or with friends and family—this does not mean your business
is inferior, it just means it is more capital efficient and has a
different structure.
Now, let’s say you are in the ball park and your first round of
capital is about $3M. What do VC’s like to invest in and what do
they not like to invest in?

What Do Venture Capitalists Look For?

In the mobile applications space VCs are typically funding one
of three business models:

1. Picks and Shovels: A favorite VC expression dating

back to the gold rush describing makers of picks and shovels
making money selling their goods than the miners them-
selves who were panning for gold (a Hit Business if there
ever was one). Examples here might be In App Ad Networks,
Analytics, Discovery, etc.)

86
Three areas of caution when it comes to selling “Picks and
Shovels”:

—— Mobile Developers are not the wealthiest of custom-

ers. Don’t expect that they will be paying you a lot
of cash out of their pockets for your product. Instead
be thinking about what they would give you in-kind,
such as In-App ad inventory or payment clearing of
premium transactions. These do not cost the developer
money upfront, but helps them to monetize their
Apps. In turn, they are willing to share their revenue.
—— Don’t say Tool. Tool is a four letter word for VCs. They
always see the demand for things like authoring tools
and actually believe they might succeed in the market,
but very few VCs have had the huge exits they look for
when it comes time to sell a tool business.
—— Most importantly, make sure there is not a player in
the ecosystem giving the Picks and Shovels away
for free. If they are, make sure your “paid” service is
vastly superior to the free model.

2. Studio Production: Think Zynga and EA. If you can select

the right pieces of the value chain and create a portfolio of
titles, scale production and distribution then you might be in
business. This is better than a “Hits Business” (see below)
in that it creates a portfolio effect for the business. Also, the
investor is not banking on a single title to hit but a system-
atic process to bring many titles to the market. What will
be important here is that your business has the secret sauce
to be a big player in a fragmented market.

Raising Money 87
3. Disruptive Business: Perhaps the most popular model for
VCs and the hardest to describe is the Disruptive Business
Model based on a Mobile Phone Application. Examples here
are ideas that will change our daily lives forever and it just
happens that these ideas are best executed on the mobile
phone. Ideas would include:

—— This will change the way consumers shop inside brick

and mortar stores
—— This will change how Merchants will accept credit card
payments
—— This will change how patients will access their health
care system
— — This will change how brands will advertise to customers
in their local area.

These are big bold ideas that will change the way we live
and, if the founders and investors have it right, they will
make a fortune. A word of advice, if you have one of these
ideas then it is important to supplement your management
team with a “gray hair” from the industry that you are about
to change. You need an insider to collaborate with to ensure
the incumbents can’t follow you too quickly and also that
there is not something in the regulations that an outsider
wouldn’t know about.

88
What Do VC’s Hate?
Most Venture Capitalist hate the “Hits Business”. A “Hits Busi-
ness” means that they need to judge if in fact your App will be
a hit like Angry Birds. Unless they are one of a handful in the
country who will back a hits business, they will tell you they
don’t like to and, in fact, cannot predict a Hit. They will go on
to tell you that not only can they not predict Hits, but neither
can the experts—Hollywood—anybody remember Waterworld?
Ironically, the one way to get a Hits business funded by a VC
is to bring them a Hit Business. If you can show massive viral
uptake and an enormous amount of eyeballs, they will fund you
to build in better ad targeting or In App purchase depending on
your model and back it with cost effective marketing.

Alternative Investment Sources for the

Smaller Raise
If your App does not fit any of the above and you are look-
ing for $100,000 to build out the next Angry Birds, you need
to consider other alternative sources. There are actually many
available, but below are four good alternatives.
Bootstrap it: Yes, just make it work on your own. Find devel-
opers who will work for deferred payments, give small pieces of
equity to the management team and have them keep their day
jobs, and finally lower your costs so that you can live on ramen
noodles for a year. You actually have the most control with this
method. Also try to generate revenue before you launch: if you
are going to be advertising supported pre-sell a sponsorship to
a brand with matching demographics or message or if you sell to
a businesses, find a user to pre-buy the first 10,000 downloads
by putting half up now. Yes, it is painful but so is looking for
money.

Raising Money 89
 Uncle John: Remember your Mother’s rich brother in New
York—well it’s time to call him. For Uncle John and for friends
you will find it easier to put together a note, royalty stream, or
both than pitching equity. With equity investments, the inves-
tor has to wait until the big exit, which for a small application
may never come. Also Uncle John might not want to be looking
over your shoulder all the time. Instead, promise Uncle John 5%
of revenues for his investment.
Angel Groups. In my experience, Angel groups fall into two
categories; the ones who like to lead with seed investments,
big ideas that they hope will get VC funding down the road or
the ones who like investing in capital efficient businesses (like
yours) that only need $100,000 to make or break it. You obvi-
ously want the latter. These groups are usually smaller and more
regional than their bigger counter parts. Once again, keep your
mind open to solve issues they may have as to lack of an exit or
payback time. There are plenty of ways to structure an invest-
ment which may solve their concerns when it comes to Mobile
Application Businesses.

Final Words of Advice

Hard problems are not always problems that matter—When you
create your pitch to a VC, you should be thinking about why
the problem you are solving should matter to your user. There
are plenty of hard problems to solve that will require PhD’s and
algorithmic experts. This does not, however, mean that these
are problems that people want solved or that there are enough
people in the world that need this problem solved. VC’s will look
first and foremost at whether the opportunity you are addressing
is big enough. Make sure your message is clear and crisp.
Team, team, team. VC’s are investing in the team as much as
they are in the idea. You must demonstrate that your team has
the relevant experience to build your business. If there are gaps
in your team, acknowledge them and work with investors during
Raising Money 90
the fundraising process to put a plan together to get right team
in place. Having these conversations during fundraising can im-
pact how much money you need to raise and what you need to
set aside for recruiting.
Traction speaks louder than words. The costs of building and
launching startups have dropped dramatically in the last several
years. Savvy entrepreneurs are showcasing companies with con-
crete evidence of product-market fit before they seek to engage
venture financing. This is raising expectations that venture in-
vestors have before committing their capital. If at all possible,
establish traction before raising money.
Any way you cut it, raising money is hard work and can
be frustrating at times. Just remember it is all about finding
that perfect match and that takes time. You will hear conflict-
ing things from different investors: one wants to see a bigger
opportunity and another thinks you are unfocused and should
be shooting smaller. You will hear it all. One time saving pitch,
which I think is counterintuitive but is very helpful, is to ask
for the No. The pitch goes like this: “Uncle John, as you know
I am trying to run a business, build a product, and raise money
and I can’t afford to waste your time or mine so, truly in your
heart is this something you can see yourself putting money into
in the next month or should I pursue another path?” Believe it
or not, I have seen some poor founders chase the same angel
investor for over a year and the angel still could not write that
check. Remember, it is a numbers game at the end of the day
and you need to be knocking on more doors with the right story
every day. Good Luck.

Raising Money 91
19
92 Checklist 92
CHECKLIST
A Quick Marketing List for Product Deployment

A Plan with at least 6 months of Versions

(Features, Revenue Model & Marketing)

A good Name and Tagline

Make a Good App Great—consider APIs, UX

A Merchandising plan (not just app store distribution)

A customer feedback loop

Moving at the Speed of Mobile and pivoting

Checklist 93
94 About The Contributors 94
ABOUT THE CONTRIBUTORS
Caroline Lewko, Thibaut Rouffineau, Carlo
Longino, Sam Chan / WIP
The WIPsters are based in Vancouver, London, and Austin and
use their knowledge, charm and good looks to connect mobile
developers to the people, information and resources to increase
innovation and market success. We also build mobile developer
communities for many of the leading developer programs. Find
us at our events such as WIPJams, Muthers!, DroidconUK; and
check out our on-line resources including the Developer Market-
place, AppStore and API Catalogs and Global Mobile Community
Calendar.
www.wipconnector.com / @CarolineWIP / @ThibautR /
@Caaarlo / @anothersamchan / @wipjam

Lisa Whelan / Socialize Mobilize

Lisa Whelan is the Managing Consultant at Socialize Mobilize,
which provides global strategy, business development, market­ing,
and developer relations expertise to clients including: Telesocial,
Onavo, Movile, Sephora, Photobucket, Face.com, Motorola, Palm,
Inc., Kodak, and others. Previously, Lisa worked for PA Consulting
Group in London, engaging European clients on strategy, busi-
ness and technology integration projects and Nokia Inc. in Sili-
con Valley. Lisa writes about trends in social media and mobile/
web/TV convergence on the SocializeMobilize blog and Twitter.
Lisa holds a MSc from the Saïd Business School at the University
of Oxford and a BA from Boston College.
www.socializemobilize.com / @lisawhelan

About The Contributors 95

Gary Cohen / ITG-Market Research
Gary Cohen has more than 25 years of domain expertise in the
wireless industry, and manages the telecom and mobility market
research group at ITG, Inc. He has held leadership roles at Veri-
zon and AT&T, built start-up research and consulting companies:
Telephia/Nielsen and Milestone Group respectively and also
launched international mobile companies into North America:
Birdstep (Norway), Flaik (Australia) and Flirtomatic (U.K.). Gary
went to the University of Colorado-Boulder where he earned a
Bachelor of Science degree in Finance and later, the University
of Colorado-Denver for a Masters degree in Marketing. He lives
in San Francisco, California.
www.itg.com / @mrgarycohen

Itay Gadot / inneractive

Itay is an experienced publisher who joined the inneractive
team in 2010 in order to attract new fellow publishers and
developers to join inneractive and help them boost their ad
revenues. As VP of Publisher Relations, he led the entire sales
and account management teams from “hello” to the app’s re-
lease, and beyond. Now as VP Marketing, he leads up one of the
industry’s top marketing teams toe form and develop dynamic
and robust strategies to disrupt the exploding mobile monetiza-
tion space. Before joining inneractive, Itay co-founded Cellfer
which published mobile books, and was a Director of Marketing
at MobiMate (WorldMate).
Hillel Fuld is Head of Marketing at inneractive and a well
known personality in the worlds of mobile technology and social
media. In addition to his marketing activities with inneractive,
Hillel works with Appboy, a leading mobile discovery engine on
their dynamic web content and brand awareness. Finally, Hillel
is a guest author for various sites including Mashable, Business
Insider, Gigaom, CNN Money, and others.
www.inner-active.com / @AppsJedi / @HilzFuld
About The Contributors 96
Jonathan Ozeran / Lextech Global Services (@jozeran)
Lextech designs and engineers mobile applications that em-
power the workforce across a number of industries including
healthcare & claims administration, hospital administration,
medical imaging, waste management, energy services, construc-
tion, video surveillance and many more. The apps we create win
prestigious industry awards, like the Edison Award’s Bronze for
“Best New Technology Product of the Year”, “Coolest App” and
“Most Monetizeable App” at iOSDevCamp, and most recently a
Chicago Innovation Award.
www.lextech.com / @LextechApps

Derek Kerton / The Kerton Group (Principal Analyst)

Derek Kerton, who wrote the section “Working with the Carriers”
is the Principal Analyst and head of the Wireless Consulting
Practice for the Kerton Group, a consulting firm focused on ad-
vanced telecom. Mr. Kerton is internationally recognized for his
telecom industry insight and consults for companies throughout
the telecom value chain (NTT DoCoMo, SKTelecom, Disney, ESPN,
Sony...) and the financial community on the telecom market
issues (Credit Suisse, Merrill Lynch, Dow Jones, Morgan Stan-
ley...). He is chair of The Telecom Council of Silicon Valley and
an advisor to Aegis Mobility and envIO. Mr. Kerton is quoted,
published and interviewed globally on CNN, CNBC, BloombergTV,
and Wall Street Radio, with his industry research and analysis
available through TechDirt, articles, research reportsm and white
papers.
www.kertongroup.com / @derekkerton

About The Contributors 97

Joetta Gobell / Magid
Joetta Gobell joined Magid in 2011 as Director of Research,
focusing on qualitative methodologies. Joetta developed her
understanding of consumers, as well as her ability to design,
implement, and analyze both quantitative and qualitative market
research during her five-year tenure in the Advanced Planning
and Strategy department at Nissan North America. Joetta holds
a Ph.D. in Cognitive Science from UC Irvine, as well as a BS in
Psychology and a BS in Mathematics.
www.madig.com

Rob Coneybeer / Shasta Ventures (Managing Director)

Rob Coneybeer is a veteran venture capitalist who approaches
start-up investing from a product perspective. At Shasta Ven-
tures, the Sand Hill Road firm he co-founded in 2004, Rob fo-
cuses on mobile and wireless startups. Shasta is an early-stage
investment firm focused on U.S. companies in the consumer In-
ternet, mobile and software sectors. Shasta was formed to back
brilliant entrepreneurs with an unwavering commitment to the
customer experience. Rob earned a master of science in mechani­
cal engineering from the Georgia Institute of Technology and a
BS in mechanical engineering from theUniversity of Virginia. He
also holds an MBA from the Wharton School at theUniversity of
Pennsylvania, where he was named a Palmer Scholar.
www.shastaventures.com / @robconeybeer

About The Contributors 98

Buce Jones / HTC
Bruce is a Developer Evangelist at HTC, business leader, keynote
speaker and volunteer. He comes to HTC after being the Devel-
oper Evangelist for the app store GetJar, a CEO and App Developer
at EventRadar, Chief Gecko at Savage Geckos, a futurist at Ford
Motor Company and a Bedouin C programmer in the deserts of
Saudi Arabia. Founder of the SQL Windows and Java Developer
Groups. Bruce has an MBA from the University of Chicago and
volunteers for efforts in climate change education, children’s
fundraising charities supporting Muscular Dystrophy, medical
research and was a presenter in Al Gore’s Nobel Prize Winning
Climate Project.
www.HTCdev.com / @htcdeveloper

Cheryl Cheng / BlueRun Ventures

Cheryl drives marketing strategy, messaging and business deve­
lopment for BlueRun Ventures. Cheryl works closely with the
entrepreneur community to identify investment opportunities
that are a strategic fit for both BlueRun and the entrepreneur.
She also supports BRV portfolio companies in their marketing
strategy, execution and business development needs and focus-
es primarily on the mobile and consumer internet ecosystems.
Cheryl brings new products and brand marketing experience
from Clorox and Sharper Image to help entrepreneurs develop
their go to market strategy and plans. Cheryl has a B.A. from
Stanford University and an MBA from Kellogg School of Manage-
ment.
www.brv.com / @cheryltamcheng

About The Contributors 99

Todd Parker / Hidden River
Todd is the Managing Director of Hidden River. He has a diverse
operational, entrepreneurial, transactional and consulting back­
ground including: co-founder and Chief Executive Officer for HR
One, Inc., a human resources software company sold to Sage
Software; General Manager of the San Francisco market of AirTouch
Paging as well as a national Vice President-Marketing and New
Product Development for AirTouch Paging and Managing Direc­
tor-Mergers & Acquisitions for AirTouch Communications, man-
aging the team of operational, tax, accounting and legal pro-
fessionals that pursued AirTouch’s aggressive U.S. partnering
and acquisition strategy (40 transactions with deal sizes rang-
ing from a start-up investment in one of the original wireless
modem companies to a $13.5 billion merger with U.S. West).
Todd was a consultant with Arthur D. Little and received a B.S.
in Communications and Entrepreneurship from Babson College.
www.hiddenriverllc.com

Jill Oana / Verizon Wireless Developer Community

Jill Oana is creating new ways for Verizon Wireless to engage
with developers, leveraging her expertise in developer relations,
partner development, product management, and global market-
ing programs. She also co-chairs the Wireless Communications
Alliance LBS SIG in Silicon Valley. Previously, Jill has held senior
management roles at start-ups and large companies in retail,
consumer, technology, and mobile industries. Additionally, she
has consulted for companies and founded Jillsicals, a custom
gift company. Early in her career, she held positions with Walt
Disney Pictures and Young & Rubicam Entertainment. Jill has
an aptitude for defining strategy and implementing tactics from
concept through completion, focusing on results, which are
memo­rable and scalable.
http://developer.verizon.com /
http://www.linkedin.com/in/jilloana / www.jillicals.com
About The Contributors
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