BIT-101 [2003-2017]

iPhone App Dev Business Models.


I saw a message from someone on LinkedIn today, asking about “luring” iPhone developers to do a project, by offering them a revenue share in order to “minimize the overhead”.

I thought that was pretty interesting. Here was my response:

Good app ideas are a dime a dozen. Your great idea isn’t guaranteed to make any money in the app store. Why should a developer develop your whole app for just a percentage of the money you are going to make? Just because you have a good idea? Most developers have good ideas too, and if they are going to risk not making anything for their hard work, they might as well balance that by doing their own work and making 100% of the profits.

So you have to ask what you are bringing to the table beyond your great idea. Marketing? Promotion? Something that will guarantee high sales? But if you are so sure about high sales, then why not just pay the developer for his / her time? If you are trying to mitigate your cost by only paying the developer IF the app makes money, then you are not so sure that it will. So again, what are you really bringing to the table?

To put it another way, this is your business venture. You are investing in your product and your idea. Part of that investment is development cost. I think you are not looking for a developer, but looking for a business partner that happens to be a developer. He’s going to invest his time in the app. So again, what are you bringing to the table beyond the idea for the app?

I think most developers, when they look at working on someone else’s project, are not at all interested in investing in an idea. They are looking to do some work and get paid for it. They will deliver you an application and it’s up to you to make money from it. If you find one willing to work on a percentage basis, good for you. But I think it is going to be hard, and will get harder as people realize more and more that the app store is not a guaranteed gold mine.

I don’t really have much more to say about it than that. I’m not saying that this could never be a good arrangement. There could be a situation where there’s an existing successful app on another platform that the customer wants ported to the iPhone. Or a brand name that would help guarantee sales. I’m sure there are other situations where this would work. Actually, my company is doing a project on this kind of basis, where the customer is bringing some pretty major stuff to the table. But simply having a “good idea for an app” is pretty lame.

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