So I am developing my own software application. It's a medical app to help people with certain conditions. It's early days and I think it is possible.
I can't say exactly what it is but it could be mobile for use during the day, and an online interface for a more detailed view and review later. It had me thinking about how I would monetize it.
We buy the occasional app from the App Store for my boys, normally I get them to aim for free apps, but every so often there is one they want for 79p or £1 something. I think the most I have been persuaded to pay was £3.99.
Free is fine but it normally doesn't give all the functionality or has some features you want to be locked in till you pay an additional sum, or you are force-fed adverts with a banner or a video on a countdown timer. I don't like these so free is out.
If the default is 79p this seems ok, but how much would it really be worth at this price? A quick google and the condition I am hoping to help people with effects 1 in 25,000 people. So in the UK, there are roughly 64 million people, which means there are possibly 2560 people that I could help.
This makes my app worth about £2000 in the UK assuming all want to buy in. But that is not realistic. If I was lucky I may get 5% of people buying my app that would bring my app value down to £101.12… How much?
I calculate it would take me about 1000 hrs to develop, and at that value would give me an hourly rate of 10p an hour. Time to put the brakes on and have a re-think. If I reverse the calculation instead it may be better.
I'd like at least £15 per hour, So that would make my app worth £15000, so I would need to sell nearly 19000 apps to make it worthwhile at 79p.
Oh and I'm also forgetting I won't get all of the 79p, the app store will take 30% so that's it down to 55p, which is an app value of £70.40. That's even less! I would need to sell 27000 copies more than the people in the UK that would need it.
I could put the price up, and cost it per user for the development. Sticking with the 5% take-up of the people with a need in the UK which would be 128 people. To cost my app it would make each copy costs £117. And add on the 30% app store fee, which is up to £152 per user. Again I'm not sure this would fly. I need to think of a different way to monetize my app.
It's an interesting subject and I have only just scratched the surface here, I was at a tech meet-up last week, and this was one of the hot topics discussed. Which was how much is software worth. The feeling was that the perceived value of software is much lower today than it was a few years ago. This might be to do with the App Store and everyone buying some sort of software at the 79p and carry it with them on their phone. Anyway, it's something that I am thinking of at the moment.
It's just a short one this week. I have been super busy. My first commercial website is almost ready to go live. I have gone through a few iterations of change with the client which has made it more polished and I am pleased with the result.
So thanks for your support and reading my posts. Living the dream now. So I have had a few more work requests come in this week and fingers crossed I will have some mega exciting news for next week.