The Smart Passive Income Blog » iPhone Applications

Taking Control – An Incredible and Inspiring Success Story ($2,325.91 in a Day!) with Benny Hsu

Pat — Mon, 22 Aug 2011 17:48:06 +0000

“This wouldn’t have been possible if I never found your blog. Thanks Pat!”

This is the type of message I aim to receive from every reader of SPI, and recently Benny Hsu from Get Busy Living sent me this very message, along with a success story that had me smiling from ear to ear.

Benny is a personal development blogger whose message can easily be summed up by this quote from his blog:

“To me it means taking control of our lives, instead of waiting for something to happen.”

And he’s definitely living his message.

His recent success story involves publishing an iPhone application, which is something he’s wanted to do for a long time.

“I’ve wanted to create an iPhone app for over a year but it wasn’t till I found your blog in November 2010 did I think I could do it.”

His new app is called Photo 365. It’s an app that allows you to document your daily life by taking one picture a day, and it organizes the photos into a sleek little calendar so you can easily get a snapshot of where you’ve been and what you’ve done.

The concept isn’t new, and Photo 365 isn’t the first iPhone app of it’s kind, but he did something right and within the first 11 days Benny has earned a total $6639.32, and he’s on track to earn a lot more since Photo 365 is now the #4 paid photography app in iTunes, and the top 44 overall app in the entire app store!

Yesterday, for example, his $0.99 app was downloaded 3,343 times and netted him a total of $2,325.91!

This was so incredibly inspiring to me, not only because of the income or because he’s been able to rank higher in iTunes than any of the 26 or so applications that my own iPhone app company has published (which is awesome and I’m definitely proud of him for that!), but mainly because he wanted to do something, saw an opportunity, took it, and is now being rewarded for his hard work and execution.

I responded to Benny’s initial email and asked him if he’d be willing to share more details of his story with the SPI audience, and he kindly agreed.

A 4-Question Email Interview with Benny Hsu of Photo 365

1) How did you come up with the idea for Photo 365?

I had been using an app similar to the one I designed. It’s also about saving a photo a day. I started using it in April 2010 and used it for a few months. However the app was very basic. No graphics. White background with boxes and a number for the date. You could tell it was created by someone who knew how to code and did a great job but it didn’t look polished.

Even before that, I thought it would be so cool to have my own app in the store. I did a little brainstorming of ideas but that was about it. I had no idea how to even get started. I didn’t think it was possible for me. I put that dream away. It wasn’t until I found your blog around October or November 2010. Immediately, I was hooked on your story and your content.

You wrote about creating apps as a side project and I thought to myself maybe this is something I really can do. Your story inspired me. So in December 2010, I got started. I knew I could make a better photo app.

I did a search of the App store and didn’t see any other apps besides that one. Because I saw so many reviews, I knew there was a market for it and I knew I could really make my app stand out with little competition.

Also I had seen online many people do 365 photo projects. Most display it on Flickr, their blog, or just post it to Twitter. So there were people interested in saving a photo a day in one convenient place.

I learned that if you try to market your product to everyone, then you’ll reach no one. I knew this app would target a specific niche.

What I did was I looked through the reviews and looked at the average or bad reviews. I read their feedback. I took notes. One thing they wanted was to be able to see the days of the week. You couldn’t see that in the other app. People also asked for a realistic looking calendar.

I looked to other apps I loved to see how it handled photos. I studied design elements that I liked.

I just took an existing idea and improved on it.

2) How did you create the application and how much did it cost to build?

I followed your suggestion to use Elance. I had never outsourced anything before but you had great experiences using it. I also bought the book you recommended. It gave me a blueprint of step by step what I needed to do from an absolute beginners point of view.

(Pat here with a really quick disclaimer. The how-to guide, How to Create iPhone Apps without Programming Experience, is an eBook that I promote, and I do earn a commission if you make a purchase through the links on this page. If you have any questions about it, please let me know. It has all of the information one needs to turn an idea into an iPhone app and put it into the App Store. BUT - it’s important to know that just because you publish an app doesn’t mean that it will become successful. The idea and the application has to be good, and even then it’s not guaranteed. Okay, back to Benny!)

In January 2011, I posted my job on Elance. I had proposals from $730 to $4000. I couldn’t understand how there could be such a huge difference. I pretty quickly eliminated the ones that sent a proposal without emailing me about more specifics about the app.

The others one I looked through their portfolio and feedback. If I was interested I would email them to sign an NDA (non-disclosure agreement) first and then give them specifics about the apps. This was my first time outsourcing anything so I took my time to find the best I could.

Once I found my team, we got started. The project started on February 7. I sent them my mockups of what I wanted. I told them about the functions. What was great about them was they also did the graphics for the app and the icons. I didn’t have to look elsewhere for that.

The first phase was working on the GUI (graphical user interface) and the icon. They asked how I wanted it to look and would come back with what they did. I sent my notes to them and they’d do what I asked. I was amazed by how it looked.

Then they started on the coding part. The first time I got to see the app was in a video they sent over. They sent videos over until it was ready to be tested on the iPhone. That’s where the ebook came in handy, as well, because using Xcode can be complicated.

I thought the app would be done in three months. The testing phase took longer but that was fine with me because I wanted to make sure the features were working right.

Throughout this whole time I emailed them. I never got on Skype but didn’t really need to.

The app was finished on August 4, almost seven months from the start date. The total cost was $1892. That price also included the work for an iPad version. That was the price they gave at the beginning and it never changed, even though I wanted to add more features than I said at the beginning.

3) How did you market the application?

I know I’m not the best person to ask about marketing my app because I didn’t do any marketing. But I had one key that really helped my sales that first weekend.

I setup a Twitter and Facebook fanpage to try and get people interested before I released the app. I didn’t really get that many followers and fans.

I created a website from a $10 theme from Themeforest.com that I slightly customized.

I also became a reader of the forum http://www.iphonedevsdk.com/. I thought marketing would be such a huge part of the app. Instead I learned that marketing is a small part of your app. How many ads have you seen for Angry Bird, Cut the Rope or Fruit Ninja? Probably none. It just spread through word of mouth. You’re better off spending the money back into the app.

I didn’t do any pre-marketing. I just posted on the app account for Twitter and Facebook that my app was available. Again I didn’t have that many fans. I also told all my friends about it on Twitter and Facebook and some were great enough to share it with their friends.

Then once my app was released, I got an email the first day from Appadvice.com who wanted to do a review.

Then I got an email from a couple other smaller app blogs that reviewed my app. A guy from Poland actually emailed me and wanted a promo code to do a review. He told me he had 45,000 devoted readers and about 170,000 pageviews/month. Sure, why not?

I will tell you, what I believe to be the key to my marketing. I released my app on a Thursday. In the forum, there was discussion of the best day to release an app. You can choose any day. The consensus was either a Wednesday or Thursday because the weekend is the busiest time for downloads. So I went for Thursday.

When your app is released it will show up under “release date” in your category. I knew I would get some exposure from that. I read that was important because people will browse to see what’s new.

I couldn’t tell how many people found my app through keywords so I just assumed most downloads for that first weekend was because it was seen in the new category.

From Thursday to Sunday my app was downloaded a total 1,325 times at 99 cents. Completely amazed! I had reached as high as #47 in the photo category.

However Monday-Wednesday my app was moved further down in the release date section so not as many people saw it. I had 219, 114, and 93 downloads respectively. I didn’t know at that point what I should do to get my app back up. I imagined I had to start asking for reviews on blogs. To be honest, I felt dejected to see sales declining after a great first weekend. I knew it would get lost with all the other apps and only be found if people searched for it.

Then on Thursday, I hit the app lottery.

Thursday night I was checking the App store while at work. I looked to the featured page and couldn’t believe what I saw. I saw my app on the screen listed right below ESPN Fantasy Football! I’ve never won the lottery before but I imagine I would react the same way as I did when I saw my app there. I was stunned and I called my sister to ask her to check to make sure it wasn’t just my phone showing it.

Why was I so excited? Because from my reading, I knew being on the featured page would be a huge boost in visibility.

Not only was it on that page but above the fold. We all know how important that spot is on a website.

If you look at the App store in iTunes it’s called “New and Noteworthy”. The only way to get in that coveted section is to be selected by Apple. There’s nothing you can do at all. They look at the quality of the apps and number of downloads I assume. I saw apps that had no reviews or ratings, so that’s not a big factor.

Apps are featured on that page from Thursday – Wednesday only. I knew this was going to be huge for my app. I literally could not sleep Thursday night because I kept thinking of checking my sales figures Friday morning.

I woke up and checked right away.

I had 982 downloads! The day before I only had 93. Apple keeps 30% so my cut would be $658.10. I’ve never made anywhere near that amount of money in one day online!

I knew the weekend would be even better. I couldn’t sleep Friday night at all When I checked I saw Friday had 1,767 downloads and Saturday I had 1,712, and Sunday 3,343! Even seeing those numbers now leave me speechless.

Since I’ve been on that page, my app has gotten to #4 in the photo category and now #44 in the whole app store! On Sunday the App store Facebook fan page featured my app. They have 2.5 million fans.

Through the first full 11 days I’ve earned $6,639.32.

So the key to my marketing was to put all my money into the app. To make it the best I could and make it great for the users. If I hadn’t done that, no matter how many review sites I submitted to, or money I spent on ads on blogs, I know for sure I wouldn’t have been featured by Apple.

4) What’s next for Photo 365? Are there any updates planned?

Well now that my app has turned from a small project into something that could last for a long time, I’m thinking about what’s next. First I have to be ready for what’s going to happen after I get removed from the new and noteworthy section. I really want to keep this momentum I have going.

I’m definitely thinking of adding more features. I’ve gotten emails about certain features they would like.

However when I created this app, I wanted to keep it as simple as possible. You take a photo, you add it for that day and you do it again. You can share your app on social media or email it to yourself.

So I know whatever features I add, I don’t want it to take away from the simplicity of it.

My developers said they are working on being able to sync photos between the iPhone and iPad with the upcoming iCloud. I know if they can do that, that will definitely be an added feature.

I had some bigger goals in mind but I’m taking this one step at a time.

In closing, I just want to say thanks to Pat. If I hadn’t come across your blog, this never would have happened for sure. Just reading your story inspired me to take action. I’m just a regular guy with a full time job still but with a goal of making money online. Apps aren’t the only way but one of many ways I am planning.

Lessons Learned

Before I finish up, I just wanted to thank Benny once again for sharing his amazing success story with us.

You can get to know Benny even better by checking out his blog at Get Busy Living.

Being a part of the app store market for nearly 3 years now myself, I can tell you that success stories like this do happen every day, but at the same time – and I’m just being honest here – there are a lot more apps that are built that never even come close to this kind of success. Many get published, and within a week disappear to never be seen again.

Benny, of couse, had a lot of things working in his favor: a very sleek and well-designed application, one that people were happy to share through word of mouth and social media (which is built into his app – smart!) and it’s one that caught Apple’s attention. He also had great immediate exposure by giving himself the most visibility in the Newly Released section on the first day, which I’ve learned to be pretty important too.

He hit the jackpot, but the most important thing is this: he gave himself a chance to hit the jackpot.

Now, I’m not saying you should buy lottery tickets and hope for a miracle, but what he did was he made decisions, took action, executed, and gave himself the best chance to succeed.

Did this happen overnight?

It might seem like it, but remember – it took him 7 months to complete the application to his liking, and a lot of hard work and probably a lot of frustration too. Things like this don’t happen overnight – there is almost always some kind of work involved for a long period beforehand.

Am I saying you should go into the app market?

No – that’s not the point of this post, although you can if you want. I’m in it, and Benny proved that there’s still room in the App Store for more success stories, even today.

My point is that whatever it is you want to do, do it! Why wouldn’t you try?

Congrats Benny, you deserve it my friend!

“To me it means taking control of our lives, instead of waiting for something to happen.”

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Taking Control – An Incredible and Inspiring Success Story ($2,325.91 in a Day!) with Benny Hsu
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The Smart Passive Income Blog Hits the App Store!

Pat — Fri, 08 Jul 2011 16:37:26 +0000

I’m proud to announce that The Smart Passive Income iPhone Application is now available on iTunes!

For the past few months, unbeknownst to many, I’ve been secretly working on an application that would make it extremely convenient for iPhone users to read and listen to the SPI blog and podcast.

An Android App will be available in the near future.

The SPI App is a high-quality, custom built application that features:

Real-time, up to date blog posts which include all of the same images and links that you’d see here on the blog, all automatically formatted for perfect reading from the iPhone.
The ability to share blog posts on Twitter and Facebook, as well as the capability to email, Instapaper, Google Reader, Pinboard or use Read It Later.
My Twitter stream, with the ability to reply to me, retweet or favorite my Tweets with your own Twitter account, directly from inside the application.
The ability to listen to the SPI Podcast. You can also listen in the background while using other applications on your iPhone, and even rate the podcast from inside the app too!
A built-in web browser. This means that any links that are clicked on from any blog posts, tweets or podcast episodes open an in-application web browser so you never have to leave the application. Once you close the page it takes you right back to where you were without having to restart the application.
A Special Page just for SPI App users. This page will have unique content and information that only SPI App users can see.

Why a Custom-Built Application?

I’ve had a lot of requests from mobile users who wanted an easier way to read my blog posts. Many suggested installing a wordpress plugin like WP-Touch to automatically make my blog mobile friendly.

If you’ve been following me for a while, you know that I always like to do things differently. The WP-Touch plugin, although it works, looks very generic and isn’t very brandable. So many other people use that plugin and I was just itching for a way to do something different, and the SPI App is what I came up with.

There are services that offer similar iPhone applications for bloggers and podcasters already, but none had all of the features I wanted, so I decided to create one for myself. Of course, it was relatively easy for me since I already have an iPhone app business and was very familiar with how this all works.

A Mobile Landing Page*

I also had my programmer do some fancy work to create a mobile landing page for the SPI blog – a page that detects if a person is viewing the SPI blog on their regular iPhone safari browser, and if they are, it shows them this page first instead:

Mmm…delicious.

*The landing page has been disabled for now. Some iPhones were not showing the landing page (older versions of the OS) and my developer is currently working on this at this very moment. It’ll be up an running again once it’s ready!

The SPI Application Special Page

Within the application there is a special page that people can view that has unique content that only they can see.

The cool part is that this page is actually reading a template page on my WordPress blog, so I can update this content whenever I want, with whatever I want, without having to change the code in the app itself. I can avoid having to resubmit a new version to Apple, which can take up to a couple of weeks.

Sweet!

I can include anything from an email sign up form, to videos, to special links and promotions and even bonuses or discount codes for future products.

This is the feature that I wanted most that no other app service for bloggers or podcasters have, as far as I know.

My Thoughts On The Purpose of the SPI Application

The app wasn’t created to make money.

It’s actually free for you to download right now if you have an iPhone.

I could sell it for $0.99, or maybe even $1.99 and probably make a few thousand dollars in a short period of time, but I feel it’s more beneficial in the long run for me to use the application as another tool in my overall branding strategy.

It’s another way for me to connect with my audience.

It’s another way for me to build new relationships and expand on existing ones.

It’s another way for me to increase authority.

And most importantly, it’s another way I can stand out from the crowd.

Here is a post I published EXACTLY one year ago that is absolutely relevant here and highly recommended reading: 7 Ways to Be Everywhere – Building a Brand Online.

Even though it’s more indirect and calculating the ROI from this one application is nearly impossible, I know that the investment will pay for itself one way or another in the future.

Would You Like an App Like This For Yourself?

Depending on the interest (and depending on some rules set by Apple that I’m still researching), I may offer a service to create an app just like this one for your blog and/or podcast too. I wouldn’t be able to do it for free since there’s a lot of labor involved, however if you’re interested please enter your email in the form below and I’d be happy to send you more information about it. There will be a waiting list depending on when you sign up, since my team and I can only work on these one at a time.

Thank you all for your support!

If you download the application, I hope it helps you more easily get SPI material while on the go. Cheers!

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The Smart Passive Income Blog Hits the App Store!
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SPI 014 : iPhone App Development and Marketing Tips

Pat — Fri, 28 Jan 2011 12:01:19 +0000

In this session of the Smart Passive Income Podcast, I talk more about my iPhone app business. I’ve written a couple of posts about iPhone apps before (here and here) and have always been asked for more, so I thought what better way to talk about the business than on an podcast session!

During this episode, I cover:

Why I’m super stoked for February 10th, 2011.
How I got into the iPhone App business.
A detailed story of our first iPhone application and the 3 things that went terribly wrong with the whole process.
How much our business makes with iPhone apps, and details about 1 of our free applications that generates between $50 and $100 a day.
A few marketing tips I’ve learned during my 2 years in this business that will help you increase your chances of a successful app business.
How much it costs to develop an iPhone app.
How to protect your idea when searching for developers.
My thoughts on the app market and if there’s room for more success stories.

No guests – just me, so I hope you enjoy this session!

Cheers!

Right click here to download the MP3

Items Mentioned in this Session:

Transcript:

Right click here to download a PDF of this transcript

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SPI 014 : iPhone App Development and Marketing Tips
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iPhone App Business Models: Paid vs. Free

Pat — Mon, 13 Dec 2010 09:19:45 +0000

As many of you know, in addition to The Smart Passive Income brand I also have an iPhone application company, LOLer Apps. We currently have 27 applications live in iTunes right now which are passively generating a decent chunk of change each month, as outlined in my monthly income reports.

Whenever I chat with people about my various businesses, my iPhone app business is the one that intrigues them the most. Maybe it’s because it’s the “hot” thing at the moment, or maybe because it’s something that they can see doing themselves too.

I’ve written about iPhone apps before (see 5 Things You Must Know About Creating Your Own iPhone Apps), but I’d like to expand a bit on some of the money making strategies one can take when developing their own iPhone apps (or apps for any other platform too).

Two Basic Business Models

After you develop an app, you basically have the choice to distribute it as either a paid application or a free application.

You can make money from both models, and depending on the application sometimes you can actually make more by giving it away for free.

For our iPhone app business, 50% of the income comes from paid apps, and the other 50% comes from free apps.

I’ll go over each model and how it works for you below:

Paid Applications

iPhone apps are sold in increments of a dollar starting at $0.99 ($0.99, $1.99, $2.99, etc.).

Apple takes a 30% cut of each sale, so your $0.99 application actually yields $0.69. It might not seem like much, but over thousands of downloads (and potentially millions), the figures really add up.

This is why Lima Sky, the two person company behind the wildly successful game Doodle Jump (which sold for only $0.99) netted $2.08 million in about one year.

Not bad.

Pros of Developing Paid Applications

Probably the biggest benefit of going with a paid application is the income potential. Although you can make money with free apps, you’re not going to see numbers like Lima Sky with money from advertisement clicks, generally speaking.

Also, the App Store seems to favor paid apps more than free apps. This makes sense, because Apple doesn’t get any money from distributing free applications (except those that incorporate Apple’s advertising platform, iAd).

Check out this screenshot of the App Store below:

In order for your app to do well, you’ve got to have exposure in the App Store. This means getting onto those top 200 or top 100 or top 10 lists, getting featured on “New & Noteworthy” and “What’s Hot”, and getting exposure as a new app in the “All [Category] iPhone Apps” space, which highlights the latest applications approved in that category, and all of this is much easier with a paid application.

Free Applications

Money can be made from free applications primarily by using a pay-per-click advertising model, which is very similar to Adsense.

There are other methods such as in-app purchases or using a free app as a preview or “teaser” app for a paid version, but for the sake of this post I’ll be talking solely about the advertisement model, which is the easiest to implement and has yielded some generous results for our apps.

There are several Adsense-like advertising companies you can use to embed advertisements into your application:

Code from these ad companies are placed into your application during the development process. After your app goes live and is downloaded, it requests to show an advertisement and then places that ad onto the screen. Here’s a screenshot of one of our free applications showing an advertisement at the bottom.

The thing is, not all of the advertising companies are the same. Some have different payouts, different advertisements, different conversion rates, and all have different fill rates.

A fill rate is the ratio of how many times an application requests to show an application and how many times it actually shows up. You’d think it would be 100%, but it’s never 100%. This means, sometimes ads aren’t shown when they are supposed to, which obviously effects how much we make.

(Note: this is why it’s important to design your free applications so that the ads show on top of your screen, instead of having a dedicated blacked out space for it. When a request goes out and it doesn’t fill, you don’t want a large black rectangle to show up on the screen.)

Because of the fill rate issue, we have a dilemma.

How do we choose one advertising platform that has the highest payouts but also has a high fill rate?

This is where the Adwhirl comes into play.

Adwhirl is a free “mediation solution” for app developers, which means you can sign up for as many ad agencies as you want and Adwhirl will make sure you always have a 100% fill rate. If an ad request goes through for one agency and it doesn’t fill, Adwhirl will immediately go to the next agency and find an ad that is available.

All of the ad agencies listed above are supported by Adwhirl, although we’re currently running a split between iAds, Google Adsense and Admob and have been seeing some nice results.

Pros of Developing Free Applications

The nice thing about free apps is that you have more opportunities to make money from each person who downloads your app.

With a paid app, you only make money on the initial purchase, and that’s it (unless you have in-app purchases). With free apps, those advertisements are constantly being shown every time a user loads your application.

This is how FreeTheApps, who I interviewed not to long ago on this blog, is able to generate nearly $800,000 in ad revenue per year – by placing ads into apps that many people are using over and over again.

Another benefit of developing a free application is that you’ll have much more reach. People download free apps just because they are free, so you’re going to see a lot more downloads than you would the same application at a price. If you want to use an iPhone app to expand a brand or reach a new audience, then I’d definitely go the free route.

Just to give you an idea, one of our free applications has been downloaded nearly 1,000,000 times in less than a year, and it continues to generate a steady stream of income (about $80-100) each day through its advertisements.

(In case you’re wondering, it’s Traffic Light Changer, which is a “joke” application. Read the reviews – they are hilarious!)

The Truth About the iPhone App Market

Winning in the iPhone app market is getting tougher these days. My partner and I were lucky enough to get into the business when it was still fairly young, so it was a little easier for us but there are still a lot of opportunities for successful newcomers – it’ll just take a little more work and a little more luck.

If you’ve got a great idea, I say go for it because you’ll never know what can happen, but I wouldn’t recommend spending the last of your savings on it or dipping into your retirement fund to pay for it. It’s just not a reliable business model in my opinion. It is, however, loads of fun!

I hope this post has shed some light as far as how paid and free apps work. If you’re getting into the app business, good luck, and I wish you all the best.

Cheers!

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iPhone App Business Models: Paid vs. Free
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Starting an $800,000 iPhone App Business with Free The Apps

Pat — Mon, 27 Sep 2010 07:38:02 +0000

I’m really excited to share an amazing and inspiring interview with Mike & Quoc of Free The Apps, an extremely successful iPhone app development company that I’ve actually paid a lot of attention to since their start, primarily because Mike & Quoc are two of my good friends from high school.

I knew they were doing really well since picking up their iPhone App Guide, but up until recently I had absolutely no idea how successful they actually were. I saw them in a recent article on Elance.com that blew my mind which is exactly why I had to get them here to share their story with you today.

All I have to say is that I couldn’t be more proud of what my friends have accomplished. They saw an opportunity, went with it, and created a life changing passive income business as a result.

Even though I have my own iPhone app business too, it’s nothing like what these guys have. Enjoy!

Me: I’m personally quite familiar with you guys and your story, but can you quickly share with the SPI readers some background on how your company got started?

Of course. Thanks again Pat, for letting us share our story.

We were hanging out last summer and talking about the insane amount of revenue that some indie developers were generating by creating iPhone apps. One guy made almost $30k in a single day with iFart.

(This is Pat chiming in – here is Joel Comm’s public release of his earnings for his app, iFart Mobile)

We’re huge tech-geeks so we talked about how cool it would be to have our own apps on the App Store. Knowing our app would be available to the huge pool of iPhone/iPod touch users was enough to get us started. Making a few bucks off it was merely an afterthought, let alone creating a real life-changing business out of it.

We were amped to make it happen, but we ran into the hurdle of learning a new programming language. We didn’t have months to spend learning Objective C, so we did what any efficient entrepreneurs would do, we hired a team of experts to develop it. The idea to outsource our business was the single smartest decision we made.

Since then, we’ve released over 22 iPhone apps in less than a year and a half. Several of our apps have hit the #1 spot in different categories and in total we’ve had our apps downloaded about 20 million times.

It’s been an amazing ride and we currently have a lot more projects in the works.

If you wouldn’t mind sharing, I’m sure my readers are curious to know: how much money does 20 million downloads translate to?

For us, we’re currently maintaining an $800,000 a year business through our iPhone apps. Needless to say, we’re quite pleased and a little surprised when we step back and see just how much we’ve accomplished in such a short period of time. That being said, it’s obviously not impossible to make some good money in this business, as you know yourself Pat.

True, but I’m not making $800,000 a year! Those are seriously some incredible numbers. I recently read a guest post you did on Elance about your success story, which is why I wanted you here on SPI. How has Elance specifically helped you with your iPhone app business?

Elance has definitely been a key to our success. With the ability to collaborate with quality professionals all over the world, we’ve been able to leverage their talents to build quality apps for our users. Not only have we used the experts at Elance to develop our apps, but we’ve outsourced all aspects of our business.

We’ve used Elance for graphic design, marketing, copywriting, and our How to Make iPhone Apps eBook cover and sales page.

Of course, if you use Elance or a similar site to find developers, you’ll have to do your research and really make sure a particular developer is right for you. We’ve had a lot of experience working with several developers at the same time, so we’re pretty good at looking at the right metrics before selecting someone to work with. Sometimes you can get 20 to 30 people bidding on a particular application, and with all of the different prices and pitches, it can really be a headache sometimes.

I know a lot of the SPI readers are interested in this industry and have been looking to places like Elance and Odesk to find developers. What metrics do you use to select a developer and what tips do you have to make sure you find the right person?

Just like everyone else, we look at the feedback and reviews. One of the most important aspects for us is the number of “repeat customers”. We’ve found that developers who bid on our projects who have more repeat customers are more likely to churn out some good quality apps and be easy to communicate with. Communication with your developers is key.

We have hired some new developers in the past who have had no feedback or reviews, thinking that maybe some of them would be insanely good, just without Elance experience, and although some of those developers were okay, it’s better to go with a trusted source. If you’re developing your first application, we wouldn’t recommend hiring someone new. You’re investing anywhere between a few hundred dollars to thousands (depending on what kind of app you’d like to make), so you want to make sure you’re getting the best bang for your buck.

I started building iPhone apps as an experiment to earn specifically a passive income – in other words, being able to earn money without trading my hours for dollars – putting the hard work in now and reaping the benefits later. Do you find that it’s a viable source of passive income or are you still finding that you need to put in a lot of hours of work each day to create a business like yours?

Good question Pat. Actually, that’s precisely why we outsource everything. By utilizing outsourcing for product creation and iTunes as a platform to sell on, almost everything we do is automated. Using this business model, which is somewhat similar to many of your passive income strategies, we’ve been able to only be required to work just a few hours a week in order to get things done.

Of course, nothing is totally hands off, and many thing still require our input. For example, when we give a developer a wireframe for a new application, he’s going to come back with us with some questions. After an app goes live in iTunes, there’s a little bit of marketing that needs to be done to get noticed. But, we’re not trading our time for dollars. Like you said, we’re putting in the hard work now, so we can benefit later and free up time to do other things in our lives. A lot of our most successful applications are still in the top 10 position in categories after only putting in a few hours here and there for maintenance and updates.

You guys truly are an amazing and inspiring story. Congratulations on all of your success! Before I let you go, I’d like to ask you one more question: What advice do you have for anyone that is interested in starting their own iPhone app business?

Execute!

It’s all about actually getting out there and doing it. Having an idea and actually creating something are two completely different things. Getting started is probably the hardest part, so get started!

“Ideas are cheap and plentiful. The original pitch idea is such a small part of a business that it’s almost negligible. The real question is how well you execute.”

- Jason Fried & David Heinemeier Hansson from Rework

Thanks again for taking the time to answer these questions and sharing your story. I wish you both continued success and millions of more downloads! If anyone wanted to learn more about what you do, where should they go?

Thanks Pat for giving us this opportunity and reaching out. We really appreciate it. They can find everything they need about us on our website at Free the Apps!

-End of Interview-

This is Pat again!

As you may already know, I’ve been an affiliate for their “How to Make iPhone Apps With No Programming Experience” guide here on this blog for quite some time now. Because I know it would be useful and inspiring for those of you who are interested in the iPhone app business, I was able to convince the guys to offer a 1 week special Pat Flynn discount just for readers of the SPI blog!

To get the special discount, just click on the Special Pat Flynn iPhone App Discount Link Here. This is an affiliate link.

The discount will only be valid until Sunday, October 3rd at 11:59pm.

I hope you enjoyed this interview, and thanks again for all of your support. I wish you an awesome and productive week.

If you’re in the Southern California area, try to stay cool and do what you can to protect your homes…fire season is upon us!

Wishing you all the best! Cheers!

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5 Things You Must Know About Creating Your Own iPhone Apps

Pat — Mon, 12 Apr 2010 07:05:58 +0000

For the last couple of months (as pointed out in my latest income reports), I’ve been working vigorously on creating new iPhone apps. We currently have 4 available in iTunes, which has grossed us a total of $6798.64 during the first quarter of the year. We’re super stoked to have 8 more apps scheduled to be released in less than a month.

Over the past weekend, 3 of our new apps were completed by our developers and are ready to be submitted to Apple for approval. More apps = more potential passive income streams.

Sweet!

Since many of you (and I really do mean many!) have been emailing me and asking me for more info about creating iPhone apps, I’ll be writing more about my experience in individual blog posts, such as this one.

If you want to get into the iPhone (or iPad) app industry, here are 5 things you should know first:

1. You Don’t Have to Develop Your Own iPhone Applications

“I would love to make an iPhone app, but I don’t know how…”

This is a phrase I hear too many times, and I’m here to tell you straight up: you don’t need to know how to program.

I don’t.

All of the iPhone apps that I’m associated with were developed by other people. These are people who understand programming who can build apps better and faster than I ever could. I just supply the ideas.

There are thousands of companies and individuals out there who make a living by programming apps for other people. It’s still a little weird to me because if I were them, I’d make apps for myself instead. But, they exist – and I know a lot of people who are taking advantage of the opportunity.

For example, Jackie, an SPI reader over at MoneyCrush.com, hired a developer to create her own iPhone app, Pay Off Debt.

Recently, MJ Wolfe, another SPI reader over at ResidulsandRoyalties.com, is awaiting his first outsourced app to be approved (which was done for only $125).

Awesome!

Even if I knew how to program apps myself, I still think I would hire other people to do it for me anyways.

Why?

Because I can multiply my efforts and even get work done while I sleep. That’s exactly how I can have 8 apps on deck for the near future.

2. Any Type of App Can Be a Success Story

Every day, iTunes showcases the most downloaded and most profitable applications, and every day it surprises me.

Some of the top apps are actually useful, some are clever, funny, and some are just plain weird or stupid. But, it’s safe to assume that these apps that become the top downloaded apps are raking in some serious dough.

There is some luck involved, but there’s a lot of other factors involved too, which I’ll save for a later blog post.

3. Getting Your App Made and Approved is Only Half the Battle

The truth is: getting your app approved by Apple doesn’t mean you will make money or even get noticed at all. Developing an app is NOT a “magic button” for success or riches.

I hope you know by now that nothing really is.

Anyways after your app is approved, there is a bit of promotional work that needs to be done in order to give yourself a fighting chance to get noticed and gain some momentum. Also, because the iTunes store is actually a search engine, keywords are important to optimize as well.

How much additional work is needed?

It’s hard to say because sometimes a good app can market itself. Sometimes, all it takes is one person with a little bit of influence to start a huge wave of downloads for you.

4. It Takes Time To Create an iPhone App

The tough part about creating an app is that from the moment you have your idea to the moment your app is approved can take quite a long time, especially when you’re not developing the app yourself and all you’re doing is waiting for the people you’ve hired to get back to you.

One of my apps took over 2 months to get developed. Other apps (more recently), have taken just a couple of weeks.

Of course, it depends on exactly how complicated your app is too.

My advice: get started soon, but be patient.

5. Free Apps Are Profitable

The most surprising thing to me is how profitable FREE applications can be.

For example, we have two versions of one application:

Shake Shake Pop & Shake Shake Pop Lite

One is a “lite” version with only one level, and the other is the full version of the application.

Free applications get downloaded far more often than paid ones because, well, they are free. Because of this, it was our intention to “feed” people from our free version to the paid one, which is a marketing strategy that is used quite often in the app store.

As a trial, we put ads on our free version – just to see what would happen. Surprisingly enough, our FREE version running ads is far more profitable than our paid version. In fact, our paid one earns upwards of $10 a day, while the lite version consistently earns between $30-60 a day.

It’s crazy.

And the “cool” part is that the money coming in from free apps are more residual than the money coming from the paid apps.

Here’s why:

Apple takes 30% for each sale of a paid application. So, with a $0.99 application, you actually keep about $0.69 per sale. After you make the sale, that’s it (unless you have what’s called “in-app” purchases, which can earn you an additional income after the initial purchase, although Apple’s cut still applies).

With free apps that run advertisements, the download is free, but anytime anyone clicks on an ad, you get paid (just like Google Adsense). This means that you have more opportunities to earn money from each download. People can click the ads on day 1, day 2, day 60, etc.

Of course, the advertising companies take their share as well, and ads running on your application do annoy some people, but they can be very profitable.

As you can see in a screenshot on this “How to Create iPhone Apps (With No Programming Experience)” eBook sales page by Free the Apps! (a well-known iPhone app developer team who also outsources their apps), they made a whopping $56,366.69 in Advertising Revenue from Free Apps in ONE MONTH.

Yes – one month.

I had the pleasure of reading through their eBook myself and I’ll definitely be adding it to my resource page, because it’s probably the most extensive guide to outsourcing your iPhone app that you can find anywhere. I even felt the need to leave a nice comment for their sales page as they begin to launch their new eBook too.

(Disclaimer: I was not paid to write about “Free the Apps!” or their eBook, however the link above and on my resource page is an affiliate link for their product.)

Final Thoughts

Am I making enough money from my apps to live off of?

Not yet, but I’m slowly getting there. And who knows, maybe one of the new apps that we’re making hits the top of the charts and we make it big. I’m sure you’ll hear from me if that ever happens!

Overall, it’s been a great learning experience and seriously a lot of fun. If you have any specific questions about iPhone apps that I can possibly answer for you in the comment section, or in a later blog post, please feel free to ask. I’ll do my best to respond.

Cheers!

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Why We’re Holding a Contest for iCaption Mobile

Pat — Thu, 20 Aug 2009 23:41:46 +0000

At this very moment, I’m running a little experiment to try and promote iCaption Mobile, our new iPhone App, while it’s waiting to be approved by Apple.

I’ve tried to contact a multitude of iPhone app review sites to do previews, which they say they enjoy doing more than reviews since it gives them a sneak peek of new apps, but I have yet to hear back from one of the 10 or so I’ve contacted. So much for that.

So instead, we’re doing something a little different. We’re holding a contest for the best “Pirate Pickup Line” to help bring people to icaptionmobile.com and spread word about the app. I think because of the nature of the application and what people will do on it (leave captions for photos and topics similar to this one), this is a perfect opportunity to do something like this. After the contest is over, I’ll go into detail with you exactly how it works and if it was successful or not.

Like I said before, the application is currently awaiting approval by Apple, but we’re trying to time it so that it’s approved at around the same time we announce the contest winner. We’ll see how it goes. We’re just trying to think of out of the box ways to promote the application.

I’d love for you to check out the contest page and enter too! There’s no need for an iPhone, and we’re looking for as many submissions as possible because we want to compile them all into a youtube video which will hopefully spread the word about iCaption Mobile even more. I love experiments.

Actually, I just sent out the first tweet about the contest at the beginning of this post, and we’ve already got 3 submissions! Good times.

Click HERE to be taken to the contest page. Entries on The Smart Passive Income Blog will not count towards the contest.

Have any of you held any contests on your website before, and if so – how did they go? If you have a link to your contest page (even though it may be over), I’d love to check it out. Thanks!

UPDATE: So it’s been 3 hours since I published this post, and we already have 12 submissions, and an entire blog post at an entry sweepstakes page about the contest. Check it out HERE. Ahh, the power of twitter. I can’t really say this is viral, but it definitely is spreading slowly.

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Annoucements: iCaption Mobile, Audio Guide, and More

Pat — Sat, 01 Aug 2009 07:18:31 +0000

First of all, I’d like to congratulate Toph for winning the $20 Target Gift card for comment #16 from the last post about How will you know when you’ve reached financial success? The winner was selected at random based on the random number generator at Random.org. If you ever need to generate a random number for something (i.e. a number of different comments), it’s the perfect tool. Toph, I will be sending you an email to get your details very soon.

Thanks to everyone who left a comment. They were really inspiring to read, and they provided me with lots of motivation the last few days because as I at times I would get tired from working on all of these projects at the same time.

iCaption Mobile

One of the projects I’ve been working on, as you may or may not know already, is the iCaption Mobile iPhone Application. Based on your initial responses from my sneak peek a couple posts ago, it seems to have a LOT of potential. So, I’ve been spending the last few days working with the developer (who is actually from Japan), and a legal dude to get everything together for the apps’ launch.

I hired the legal dude (via elance) because this app has a lot to it. I wanted to make sure my butt was covered from all angles (that sounds weird), and that my company would own the rights to all of the things people submit to us through the app, such as captions, taglines, photos, etc. Why? Because it would be really easy to take some of this content and turn it into a book. Personally, it would make a really nice coffee table book, or one that you stick in the magazine rack next to your toilet. However, the app needs to be successful first – so we’re just doing everything we can right now to give it the best chance to be just that.

Personally, I’ve been working on designing iCaptionMobile.com – the app’s website. I actually missed doing some html and css stuff myself, so I am proud to say most of the work done on there was done by yours truly, although it is based off of a free wordpress theme. If you take a look, you can witness the very first post I did on iCaptionMobile.com, as well as some new screenshots and the story behind the app. Oh, and if you look at the overall design of the website – it’s supposed to mimic the iPhone app. For example, the header at the top with the “Home” button looks like it’s from the iPhone, and a lot of the designs come straight from iCaption Mobile itself. Hopefully the continuity between the website and the iPhone app will add to it’s success. We’ll see, but I’m glad you’re following me on this journey.

There’s a place where you can submit your own ideas and photos to be captioned. You are all invited to participate if you’d like – you don’t have to have an iPhone or the application in order to do so.

Audio Guide is Finally Finished!

In addition to all of that, the voice talent I hired to create an audio guide for intheleed.com just delivered the final product to me tonight. I’m really excited to get that out and on sale again, because the first time I released an audio guide, it nearly doubled my monthly income. This you can see in the spike from my income reports graph. Obviously, I’m hoping this will happen again.

Now that the audio is finished, I can turn that and my eBook into an online class on my website. Then, maybe my income will quadruple if I do it right. It will take a lot more time because this is something I can’t really outsource, and I’ll be creating some slides via software that I never used before, but looks REALLY impressive. Check out SlideRocket when you get a chance. It just received 5 mil in venture funding, and has been said to be WAY better than powerpoint.

Some Final Words

So, that’s where I’m at now. While working on all of these projects at the same time, I’ve learned to stay very organized. I have a three ring binder with dividers that section off each of my projects. Within each, I keep track of everything I’m doing on a timeline, and have to-do lists and notes in there too. It really helps you regain focus when you lose it sometimes, especially when there is potential to mix things up. Luckily, each of my projects are pretty unique, so I’m keeping things separate, even in my head. I could keep track of these things on a computer, but it’s nice to get away from the computer sometimes and actually write something again – with a pen and paper.

Oh, and if you have something to do on your to-do list, focus on that and don’t even worry about anything else until that is finished – or else it will never get finished at all.

A Must Read

Lastly, I read a post from J.D. at Get Rich Slowly, who wrote about how you can manage a budget when you have an irregular income. This was a perfect post that was right up my alley, and maybe you’re too. Enjoy!

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A Sneak Peek: iCaption Mobile Pre-Release Screenshots

Pat — Sun, 26 Jul 2009 07:29:05 +0000

iCaption Mobile is a little project I’ve been working on for the last – oh, 3 or 4 months. I haven’t told anyone except my business partner at LOLer Apps about it, but I finally got the Beta Version today and would like to share it with you and give you a little preview of what’s to come.

iCaption is an iPhone application that combines the best of F My Life, and Twitter’s trending topics, which are both really popular user-generated type entertainment streams right now. There are still some bugs and design issues to work out, but so far I’m extremely pleased with the results. I’m hoping this one does even better than our last app, Babymaker, which has officially grossed over $6000 in sales within the first month.

The idea behind iCaption is that each day a new photo or topic is uploaded to the application. Users will be able to create their own captions and vote on other people’s captions for each. There are a lot of witty and creative people out there who I think would love this kind of thing.

So one day, it may be a picture (like this one) that could spark a lot of funny captions and comments. Another day, it just might be me holding a sign that says something like, “The REAL show title for Jon & Kate Plus 8″, or “Things you should never say while drunk.” Random stuff like that. I think people would get a kick out of it – by creating their own captions and reading hundreds of others for the same photo or topic.

Here are some screenshots of the user interface. Remember, this is a beta version, which still has some design issues and bugs to work out before it’s ready to launch. Check it out:

Both the designer and the developer did a wonderful job. The nice thing is that I can put upload pictures and topics in advance, so I won’t have to work too hard after one long upload session. As far as pricing and monetizing, that is still in the works. I may have it become a free app with ads, or maybe just sell it at a $0.99 price point. The more users, the better so I definitely don’t want to overcharge for it. I hoping with enough people to start, it will gain momentum and I may be able to charge people to submit their own pictures and topics, or even have sponsors for each day…we’ll see.

So, if I can have 3 iPhone apps launched, 2 eBooks published, an online class, a 6 figure income website, an affiliate review website, a potential book deal, the Smart Passive Income blog, and a baby on the way – all within a year, why should you ever say that you don’t have the time or energy to do just one thing to possibly earn an extra income for you? If you want it bad enough, and I mean truly want it to happen – it will.

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Baby Maker iPhone Application – One Week Later

Pat — Mon, 29 Jun 2009 20:07:29 +0000

A week ago, I announced that a new iPhone app my friend and I created was finally approved and on sale in iTunes. I’m sure you’re probably interested in knowing how it’s doing so far.

After just one week in the app store, Baby Maker has done really well for us. To give you something to compare it to, I’ll share some numbers from our first application, iPopit!

As I said before, iPopit! didn’t do as well as we had hoped. In 2 whole months, it has earned us about $395.73. We put out a “lite” version with advertisements that has earned us $547.06, for a total of $942.79 – an average of about $15.71 per day.

Baby Maker, which has been out for only a week now, has earned us a total of $1287.70 - an average of about $184.00 per day. (All of these numbers have already taken into account Apple’s commission of 30%). Now we’re getting somewhere!

Things to Think About

If you ever plan on getting into the iPhone app business someday, here are some things to think about before you do:

Do “One-Trick” Ponies Work?

When I announced Baby Maker was on sale last week, I received a few comments from people who knew this app would do way better than iPopit, because iPopit was just a “one-trick pony”, while Baby Maker could actually produce an infinite amount of results.

My response to that is that one-trick ponies can be successful. Just think of iBeer (the app where it looks like there’s a beer in your phone. You can “tip your mug” and it looks like you’re really drinking it). I’m sure that one has earned over 6-figures. But, in order for a “one-trick pony to be successful”, it has to be really good, and really creative.

iPopit was clearly not that good.

Marketing and Advertisements are Important

You can’t just make an app and just hope it takes off. You have to market and and advertise to give yourself a chance to reach as many people as possible. We decided to reach out and purchase some ad space for Baby Maker which we did not do for iPopit. I contacted a person at AppVee.com (an iPhone app review website), to ask about some of their advertising opportunities. We ended up paying $199.00 for a 30-day ad that is shown in their free iphone app, which provides helpful reviews for iPhone apps on people’s iPhones.

In just 7 days, that ad has been clicked about 1100 times!

We must be doing something right, because all of our efforts has gotten us some reviews on app review websites which didn’t really happen with iPopit. Here are some links in case you’re interested:

MobileTechAddicts Review

AppCraver Review

All in All

Probably the biggest reason why Baby Maker has been more successful, and is right now at the #26 position in “Top Paid Apps” in the photography category in the app store, is because it’s just a better, more fun application.

Thank you all for being interested in our iPhone app journey! As far as iPhone apps and how it relates to passive income, you can’t really just “set it and forget it”. It takes a lot more work than just the creation of the app itself, but there is always the potential to earn big bucks if you get it right.

p.s. Some EXCELLENT conversations going on in my last post from a couple of days ago, Starting the Home Buying Process (in Today’s Economy). I’m definitely keeping a close eye on all of your opinions. Thank you so much for helping me understand things a little better!

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