An interesting idea: App.net will be paying “at least $20,000 per month” cumulatively to app developers, divided according to each app’s popularity and user satisfaction ratings. So a reasonably popular app might get a few thousand bucks a month.
It’s a strange move, though. It doesn’t look confident. This reminds me a bit of RIM’s strange $10,000-guarantee-if-you-make-at-least-$1,000 deal. (Apple and Google never needed to pay developers to make apps for iOS or Android.)
You’re trying to solve a chicken and egg problem here.
Consumers are less likely to buy into a platform if “the apps they want” (see note 1) aren’t available for it.
Developers are hesitant to commit to developing for a platform where the revenue opportunities aren’t there.
The challenge is to bridge that gap for developers. You can
- ignore it and pray
- give them non-financial incentives, such as marketing and promotion, high profile in product launches, and other partnership goodies
- pay developers to put apps on your platform (effectively, going to, say, Starbucks and offering to fund the app development for them)
- subsidize the app ecosystem to get it off the ground and give developers a revenue stream until it grows enough to be sustainable on its own
For the first two, your platform needs to be pretty persuasive today if you want to go up against IOS and Android and expect developers to just wander in and play in your territory. When we were booting up webOS, it was (relatively) easy to do the “not Apple”, because Android hadn’t yet booted either, and all of the other platforms were missing or tightly managed. Today, booting a platform like webOS would be a lot harder, IMHO.
So you need to inject money into the app ecosystem to help developers survive as it boots. Typically the worst thing you can do is pay developers to build apps; they’ll take the money, see how little of it they can spend to get an app out the door, and you get a crappy app and they don’t care because they’ve been paid. They invested in shipping the app, not investing in the ecosystem, and in lots of cases, will never care if it sells a copy.
So it’s all about finding ways to build revenue into the ecosystem in ways that give incentive to both publish apps and to have those apps quality ones and well received by the users. with webOS, we did a series of promotions (please, god, don’t call them contests (see note 2)). With webOS, we tried to structure things to reward success with end users — most downloaded apps, for instance. With the Touchpad, we injected money into the ecosystem by attaching a $50 credit to every TouchPad sold, allowing buyers of the tablet to choose how to spend it. Both of them.
FWIW, I’m not sure $20K a month will do a lot to boot the ecosystem. That doesn’t spread very far when you’re talking about trying to help developers pay back development expenses. For webOS, our budgets were more like a million a quarter, just for comparison.
So both RIM and app.net are on the right track, if these are implemented properly. RIM’s guarantee makes sense because they’re trying to attract the class of developer/company that already has an IOS and an Android app and is saying “what’s in it for me? why should I bother?” — at least now, there’s some financial incentive, where, honestly, marketing/promotion or “hey, we’re not going to suck in year, you want to be part of this!” aren’t going to generate much enthusiasm. You put the $1000 floor on earnings to avoid getting flooded by five thousand tip calculator apps that exist only because people want a chunk of the money you’re giving away. It saves you from paying out money to the, um, lower-caliber developers that are simply trying to grab your payout and not really trying to build a usable app that’ll help your platform.
IOS doesn’t have to do this because they are the 800 pound gorilla, and have a zillion units in the hands of consumers looking for apps to buy. Ditto Android. What RIM is trying to do is get into that game again. It’ll be interesting to see whether they succeed. And they can’t do it by making promises or asking people to invest in building apps in hope of future returns. The class of app they need to attract will nod politely and then go plan their IOS next generation app instead.
App.net is in a different place; I think this is more about encouraging some of the twitter developers to give them a shot, and to create an ecosystem where the developers have a bit of help so that they can give the apps the time for the platform to find a large enough audience. The developers that app.net are likely trying to attract are a lot different than the ones RIM need to grab (app.net is going to be the individual/homebrewer and the tiny shop, RIM needs corporate and mid-sized shops to buy in), but I still wonder if that amount will make a significant difference. We’ll see…
(note 1: “the apps they want” is actually fairly hard to define. There are likely 20-30 apps that are universal to almost everyone, from email and contacts and calendar and maps. There are a larger set of a few hundred that large chunks of potential buyers are going to want SOME of, whether it’s a Starbucks app or Netflix or their bank’s banking app or whatever. And most people have a couple of apps in the “gotta have” pile that are definitely niche apps, but the lack of them can be a killer. In my personal case, those “gotta have” niche apps are my birding and nature guides. A platform I can’t get those on I probably won’t consider, but 95 out of 100 readers of this blog post will shrug and go ‘huh?’? Everyone has those apps — and none of them are common apps in any way, shape or form, which is why you need to try to build a diverse and large app ecosystem. It’s basically the same reason why a steakhouse has a token chicken or fish dish on the menu: to prevent that one “I won’t eat beef” person from keeping the entire dinner party from coming to that restaurant…)
(note 2: the nanosecond someone utters the word ‘contest’ dozens of lawyers warp in through a wormhole and start having hissy fits. it turns out that having a contest is an incredibly complicated and regulated process and involves things like creating ways for people to enter without actually spending money or owning your product and things like that. So you end up sitting down with your lawyers and making damn sure you use language that doesn’t turn it into a contest. Even if it kinda looks and smells and quacks like one.)