To app or not to app? That is the question

By Angela Schuster

Regardless of whether you have kept abreast of the latest web app trend there is no doubting their influence. The problem is there are a whole lot of completely useless apps out there. So if your objective is to make money out of an app how do you go about it and how can you make consumers see that your app is not just one of the pack?

What is a web app?

A web app is simply a web application which combines the power of the internet with the multi-touch technology of smart phones and tablets.

Users can browse a constantly growing list of over 1,700 web apps before choosing which may be useful for them and installing it either for free or a given price. You then have access to that application at the touch of a screen.

The good, the bad and the ugly

Problem is, with such a huge and ever increasing range of web apps on offer, how do you know that what you’re installing is useful?

For example, an app for a marketing magazine, which can be downloaded at a price, sounds great. One would assume that at the very least it would give the user access to some useful articles. Unfortunately though, it offers no option for ‘testing’ the app and seeing what it offers, making you pay before you have any idea what you are getting. Understandably potential users may be hesitant to buy before they try.

Conversely, an app offering baby games not only provides the user with access to some free trial games, but offers the option of upgrading through payment to the premium version and accessing even more. The ability to ‘test drive’ the app gives users a chance to see whether it will work for them.

How to make money from an app

If your objective is to make money from a web app then you need to be able to differentiate your app and offer users something of value so they will be happy to pay for it. The question is – how to do this with such a mass of web applications available.

  1. Make sure it's a ‘real’ app: It is important to make sure it is a real app and not just an advertisement for your business which can actually do more harm than good. Remember, you need to offer potential users something of value for them.

  2. Offer a ‘cut down’ version: Through offering a ‘free’ trial you have the ability to get users hooked on your app, as with the baby games example above. Research has shown however, that if you offer a ‘free’ trial or limited use, then the vast majority of users (it has been claimed the industry average is about 98-99%) will use the free version with a minority paying for the upgraded edition.

    Therefore, be careful not to fall into the trap of overestimating the number of paying users you will get. If you estimate for example, that you will get 1,000 users in the first few months then work out how much money you will bring in if you get 2% paying for an upgraded version. Based on this information you will need to create a cashflow spreadsheet in order to determine if your web app is financially viable.

  3. Offer a ‘preview’ of additional tools or services that the upgrade will provide: In order to increase the proportion of users that will pay for an upgraded version of your web app make sure you offer a ‘preview’ of additional tools and benefits that they will receive with an upgrade.

  4. Minimise risk: Minimise risk involved in launching a web app through, if possible building it as a ‘side project’ to your paying work so you are not solely relying on this money and any revenue is a bonus.

  5. Test yourself: A great test of whether your web app will make money is the credit card test. Ask yourself honestly whether you would be prepared to take out your credit card and pay for the service you have developed. Understand your target market and put yourself in their shoes.

  6. Do your research: Understand what other web apps are out there and potential competition to your concept. How will you differentiate yours? Do you have marketing channels in place?


The Upshot

Web apps can be a useful string to your business bow but can also fail dismally or be lost in the multitude of apps already out there. The key is to differentiate your app from the pack and make sure you are offering potential users something of value. The six points above offer some handy hints and tips to consider when trying to make money from your web app.

Stay tuned for our next blog: Getting on the right app track (or avoiding creating an app that fails).

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