I think I see the problem...
"venture-backed opportunity." Jesus wept.
What ever happened to making something people want and charging money for it?
Being the (in)famous founder of 4Chan looks like a pretty good platform from which to kick off a mobile application startup. But not even Moot, one of the visual forum's founders, has been able to make a go of it with DrawQuest. That's despite, as he writes here, 1.4m downloads over the last year, 25,000 daily users and 400, …
No you got it mixed up:
First you make something people might want but don't want to pay money for.
Then you brag about how many "users" you have whilst burning money.
Then you get bought out by a big Silicon Valley VC/ company because you must be worth a billion dollars with that many users right?
Then Profit!
Look at Instagram not a single penny in revenue but bought for a shed load of cash.
Sure. Google bought Youtube on the same basis. Several years later, Youtube is a profit center. Capturing users actually is the hard part. When you move to monitisation you follow the 80/20 rule: keep the 20% of your users that are willing to pay and cut the 80% of dead weight off. Oddly enough, it actually works.
A good example here is Dropbox. Would "most" Dropbox users pay for the service? Hell no. Most people would move on to the next cheap whatever. There are a lot, however, that if Dropbox said "tomorrow we are going to start charging $X/month" they would get out the credit card and just whack the mole.
About the only place this doesn't apply is social networks. Here you aren't offering a product to be consumed or used. You are offering a communications system, and that means that the value of the platform to anyone is directly proportional to how many people are on the system. (More accurately, how many people that individual user actually cares about are on the system.)
A phone network that only reached 1 in 10,000 people wouldn't exactly be worth a hell of a lot of money, unless those 1 in 10,000 people had something in common and a reason to establish a communications system that only encompassed their group.
So the fundamental model of "get a bunch of users, get venture capital, cash out and let a trained CEO take the venture to profitability" is not fundamentally broken. It is, however, something that only really applies to certain types of products and doesn't apply at all to social networks.
Instagram is another example here. The Instagram thing wasn't about the "social network" element. It was because it offered a platform for online imagery collection with a large userbase. Now the trick is to convince photo labs around the world to accept orders via Instagram and convince users to pay for photographic products.
Ultimately, Instagram will expand to allow professional photographers to mount galleries as online proofs with integrated ordering (Similar to ImageQuix.) This is where the real meat-and-potatoes will come from, as the "art"-class prints can run quite a bit of money. A 40"x30" mounted on canvas and properly sealed is something a professional photographer can sell for $3000 in the right market. Metal prints or backlit acrylic stuff can go for even more...and there is always some swank office tower somewhere looking for a nice picture of the skyline for their lobby.
So Instagram will take several years to follow a Youtube trajectory. Gradually offering more and more professional services. Advertising, lab integration, etc. Ultimately, they'll get click charges on orders or even % of total transaction setups. The name cache of "Instagram" will have value. The average punter knows what Instagram is. They haven't the foggiest clue in hell who ImageQuix let alone the lab-branded online galleries.
At least, that's the theory. Whether or not Facebook has the nous to pull it off is an entirely different story.
Startups, eh? *madness*
I am still trying to figure out whether his biz plan had a fall back to be available to non-Apple platforms. I read his blog and looked at the iTunes store.
It seems tragic, possibly wasteful, that his app, as good as it appears, may have suffered from a bit of elitism. Granted, one dev may not have the resources to singly develop and port to multiple platforms, agnostically. But, some devs DO, and apps do indeed exist to help developeers.
If investor money went into this to something greater than $100,000, then those investors should have demanded cross-platform compiler use to ensure maximum ROI. There are IDEs that will port to Mac, Linux, and, of course, Windows, so, maybe some can do it for mobiles, too. If mobiles are catered to from some of the European dev tools makers, agnostically, then maybe his memoir will (should? Better?) include in it a section about the perils of allowing elitism (no matter the source) limit the audience.
Also, is there not the risk that Apple may severely crimp income potential, and even worse, influence whether non-powerful developers may have permission to put up their app if they dare to also support Windows and Android devices? If that risk is real, and if it impacted him, he might (should? BETTER?) bemoan that, too, as a possible source of failure.
Any team with more than 5 developers probably has room to hire/include a multi-platform-skilled developer to help build ports/port builds as a fallback/ejection seat mode. No mobiles developer should be crimped or boot-to-the-neck constrained by any one company. Not saying Apple did that to him, but I seem to recall some developers prior to 2012 being disgruntled about it while others/readers viewed it as necessary and Apple's right to stranglehold the market against competition it didn't want. Of course Microsoft could/probably did play this game. Linux is not likely to wield such power, and Android seems to get that power by the sheer dint of various phone/tablet makers churning out more powerful apps.
BTW, anyone notice that DrawQuest required 17MB of storage space? I don't know if it really is the total, non-data size, or the download size, or the combination of the two after the payload is unpacked and compiled against the iDevice targets.
Finally, Apple and Android devices REALLY need some sort of up-front micropayments option so that wary punters can try with minimal risk, and if they like it, agree to around 5 or 10 cents a day until they want to stop (at a whim, or at a pre-set date, or upon reaching a certain contribution). Unfortunately, the costs of transactions probably nullify this as wishful thinking on my part.
What needs to happen, too, is after vetting and downloading from an inexpensive source/repo, another party should handle the monetary rewards side. Apple and Google probably need to be eviscerated from the primary income stream so devs can charge what they need, and if they get lucky and take in wildly more than anticipated, "give something back" and SHOW their supporting users how that "excess" money is being used. Users probably would rather see it going to noble/civic causes than just lining the coffers of Apple or Google or Microsoft. Cut out all that extra "overhead" and maybe, just maybe, small devs might make some meaningful income if end users latch on to some social/civic/dev-rewarding cause the USERS care about.
Just my $0.99
It was the name. Fancy calling something "DrawQuest". Lame.
My extensive experience has taught me that successful apps have a few keywords mentioned upfront. Thus, I'm developing an app called SmashBoxFish, Cow-Hacker Edition. I don't know what the app will do, nor do I care. The name itself will be enough to get the money rolling in. Jeez, you think 4chan would have thought of that.
> successful apps have a few keywords mentioned upfront
I had to google to find out what DrawQuest actually is. I don't know if that's because I've stayed too long under my rock, or if you have a very good point indeed.
I'd have to disagree. I had never heard of DrawQuest either, before this article,and after looking it up I can see it's not something I'll miss. But certainly the name is evocative of the product, and people who are interested in that sort of thing wouldn't have trouble recalling it.
It's certainly a more relevant name than "Instagram" (which could be for anything from messaging to drug purchasing), "Banjo", "LivingSocial", "Hulu Plus" (if you're not already familiar with Hulu), or any number of other supposedly successful apps.
http://www.forbes.com/sites/andygreenberg/2014/01/22/3d-printed-gun-creator-cody-wilson-lands-quarter-million-dollar-book-deal/
I will need to re-read it to figure out how much venture money went into HIS "product".
Imagine if someone sells the 3D plans of the gun. Might bring in another half million. Well, until the Law steps in and seizes it and attaches all sorts of penalties to make an author wish to be un-born...
Read your own linked article:
"Wilson, who leads the 3D-printed gun group Defense Distributed, signed a quarter-million dollar deal with Simon & Schuster’s Gallery imprint in December to write a non-fiction book chronicling his quest to create the first fully 3D-printable lethal weapon."
The money is for a book about building the gun, not the plans. The plan's were available free so there would be no point in selling them. This is like Linus Torvalds publishing an autobiography and people claiming he is selling Linux discs