A simple app economy equation. #apps #tech #mobile

For those who think it’s a case of sticking an app up in the AppStore and seeing if it “makes it”. Here’s a quick handy guide on the making money bit….

(n * 1.3) / (r * 0.7) = Number of downloads

Actually it’s really the sum on how many downloads you need to put food on the table. For those who are risk averse to raising money and filling endless forms out for funding.

So n is the nett amount  you want to earn. Multiply it by 1.3 for tax and so on giving you a gross amount that you should be aiming for.

The Creature From The Black Lagoon, he likes cupcakes. (cupcake not shown).
The Creature From The Black Lagoon, he likes cupcakes. (cupcake not shown).

For example: Beatrice wants to make £25,000 a year take home on her app “Cupcakes for Aliens”. So gross earnings would be about £32,500 per year.

Next the app itself, r is the retail price of the app to download. Beatrice wants to charge £1.79 for the app. Fair enough we say. Once Apple (or whoever) take their cut you’re left with a lesser amount. In this instance 70% of £1.79 is £1.25.

The number of downloads is a simple gross divided by the app income. 32500/1.25 = 26,000 downloads.

Okay, what if I was to say, applying the 80/20 rule.  80% of your downloads will happen in the first 20% of the lifecycle of the app?

Assuming that we use 20% against the 52 year on launch can you do 20,800 downloads in 10 weeks?  Also assume that your chosen app store won’t highlight your app.

Okay, it’s raw numbers and it’s overlooked by people most of the time for various reasons. The figures above don’t even include development time, designers, marketing…. non of that. This is new new economy where everyone does everything for nothing on a hope and a prayer that it might hit big.

As new apps are added everyday the probability of hitting it “big” diminishes.

Welcome, dear reader, to the numbers game.

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