Apple : Help the best app developers not get “acquihired”!
This morning, I learned that Sparrow, my favorite email application on both iOS and Mac OS was acquired by Google and subsequently shutting down. The first thing I do each morning and the last thing I do each evening is check Sparrow. Sparrow made email fun again. And… now it is gone.
I have no idea why the Sparrow team chose to be acquired. Perhaps they have dreams of changing the world of email - and there is certainly no better place than the Gmail team to make that happen. Yet - Google and plenty of other big firms have done a terrible job at harnessing the talent that young entrepreneurs have. Whether it be bureaucracy, current inertia, internal politics or some other lame excuse, acquired talent streams out of big companies.
Sparrow is not alone. Google recently acquired QuickOffice too.
Perhaps there is another explanation. One that Marco Arment touches on in a blog post today. Perhaps Sparrow’s business wasn’t healthy. A-team engineers are expensive and paying them top notch salaries while selling a $1.99 app is hard, maybe impossible. Perhaps their engineers were tired of eating Ramen noodles or wanted the $250,000/year salaries they know they have the talent to earn.
This is not a good trend for Apple. Apple is depending on apps like Sparrow to make the iOS platform shine. Excellent apps like Sparrow cost a lot of money to build and maintain. Apple should be working hard to ensure independent app developers can earn even more than top salaries at Google, or they will all be poached away.
There are two things Apple can do to help developers make more money:
1) Allow developers to charge monthly/annual subscription pricing.
An app developer can only charge a one time price BEFORE the user has experienced the app. This price must be low enough not to scare away users, yet high enough to pay for the operations of the business. In the productivity app space, we are seeing more of the former, not the later. (a) I only paid $9.99 for Sparrow years ago and yet it has added a lot of value to my life. I’m definitely ready to pay more, even an annual subscription - the way I do for Evernote, Dropbox or Backblaze.
In the iTunes store, when you buy a song for $.99, the artist has already created the song and it never changes. A lot of games in the app store are like songs, or more naturally can use in-app purchases to generate revenue. Productivity apps need a different pricing model.
2) Allow developers to track the success of social and internet ad campaigns.
Today, if we decide to spend $10,000 on a LinkedIn campaign *AND* TechCrunch decides to write a blog post about my product, I have no idea which source I should attribute the increased downloads to. Once a user enters the App Store, I lose all ability to know the source where this user was originally acquired.
Independent developers have very limited ad budgets and many productivity apps are not inherently social. Ads are required to attract users. Developers need to run lots of small experiments, figure out what works and double down on those sources. Yet, we are blind. (b) Apple has concrete data - it should expose our campaign data to us, privately.
Over the years, Apple has added more vertically oriented pricing models to the iTunes/App Store world. Two examples are movie rentals and magazine subscriptions.
Apple - make productivity apps the next focus!
Nilay Patel, Co-founder and CEO
(a) I’m omitting in-app purchases in this discussion about productivity apps. There is no way an app like Sparrow or QuickOffice can implement in-app purchases without making users feel like they are being nickel and dimed.
(b) I am well aware that there are many tricks developers can do to “guess” which campaigns generate which results. These are all still guesses.
