Giving up on an iPhone App Business

John Gruber of Daring Fireball fame writes here about his failed attempt to make a sustainable software business. Their product was an iPhone notes app.

It is a good read, and another reminder success is elusive creating app in a very crowded market with prices pushing toward zero. In Gruber’s case, it was with an app that competes with a free product supplied with the platform.


I would have added a Step 0:

  1. Is there an actual market for this? Do people pay for tools like this? 1-2 examples dont count, unless you know exactly how much profit (not sales) they make. And is there a bootstrapped company that makes a profit, one that doesn’t have tons of VC money to burn thru?

There are still people who hope to make money on mobile apps? Unbelievable.

A few years ago an average annual revenue per paid app was something like $300.


I disagree. I think there is still a huge market in the app stores. But I think you need to do it right.

In the case of Vesper it doesn’t sound like they talked to customers at all. They didn’t really create something new or truly valuable compared to all the free apps.

Maybe they could have talked to college students and found that one of the most tedious things they do is converting their notes to notecards for studying. Well what if they app had a format for automatically converting your notes to notecards for studying. Is that something students would pay for (or perhaps better are there opportunities to get colleges themselves to pay for it for their students as the default campus note app, etc).

Anyway, I think the market opportunities are huge, but you have to take the same steps that you take for an online or otherwise bootstrapped company.

Please quantify. How “huge”?

Well the app market is a multi billion dollar market that continues to grow. So about as big as you can get. Again this is assuming you’re creating a product that actually provides value that folks will pay for.

As an example my buddy founded and they’re making millions selling study apps for $30-50 each. This is a valuable product and I think they are actually cheaper and more effective than traditional study books from like kaplan.

So again, the opportunities are there. Just don’t want to underwrite the app market if you approach it correctly.

The market is indeed huge. Tons of people make their living building native iOS applications. Understanding your market and your business model are key just like all other businesses, as usual. For many companies making money from sales of the actual app itself is not part of the business model. The app is usually completely free, the app itself though is fundamental to the business model. Take Evernote, all the Adobe Creative Cloud apps including Lightroom, any/every banking app in existence, every major health and fitness app, nearly every medical app, etc. etc. Stop thinking about the app as the end of the line or a magical pot of gold at the end of the rainbow.

And, if you want to build an app as the actual product that you are selling, then do it right and you can indeed make a profit. I suggest you watch “Effective Strategies for Selling Out” by Josh Michaels, in a couple of weeks when the recording is release on the 360iDev site.

Sorry, it doesn’t appear they sell an app. They sell a content distributed via an app, right?


Perhaps I wasn’t clear – I was puzzled someone was trying to make money selling a naked app (without a service around it) and hoped to make a living.

I wasnt talking about iOs apps in general, but the domain the original poster was targeting.

Evernote is in that field, but they’ve raised hundreds of millions of VC money, and not really shown much of a profit, from what I can see.