Successful entrepreneurs: the art of app monetization
As of September 2014, the number of apps available by operating system were as follows:
- 1,350,000 Android apps
- 1,300,000 iOS apps
- 300,000 Windows apps
- 150,000 Blackberry apps
That’s a whole lot of apps – and it’s likely that the number has only grown since last September, and that it will continue to increase. So, if you’re going to create a successful app, you need to become more creative about how to fund it. Here is the route of one entrepreneurial duo.
Mason Day’s monetization strategy
Mason is the co-founder of GrowIt!, a free mobile application that “inspires and connects new gardeners.” GrowIt! won the gold medal in the home and garden category of the Design 100 2014 U.S. Mobile 7 App Design Awards.
Mason was able to secure initial app funding from his workplace (more about that later) but is also looking towards the future. The traditional funding answer, of course, would be to charge for the app, hoping to see the dollars flow in with the downloads. But, according to Idea to Appster, “While the prospects of paid apps are very tempting, the reality is that nobody likes to pay for apps. Unless they reallyreallyreally have to.” Moreover, “most users expect basic apps to only cost 99 cents, so you’ll need tens of thousands of downloads before you actually begin to see a return.”
Because of the way that GrowIt! functions, he and his co-creator are automatically collecting potentially valuable data that isn’t easy to come by in the horticultural world, including but not limited to the ages, genders and locations of users.
Target, he points out, has data on just how many red pencils are sold, along with huge amounts of data on shopper demographics. In horticultural, though, a retail operation may know that someone bought a gallon pot of something, but not necessarily of what. So, while the app is helping gardeners, Mason and Seth are also collecting useful data to create packages that companies could theoretically buy – companies such as plant distributors, garden centers and seed companies. That in fact is one monetization strategy that they may use. Fortunately, they’ve handled the app development process strategically and so they have time to decide upon the best monetization route for their product.
Other routes that app inventors can go include:
- In-app advertising
- In-app sales
- Premium upgrades of the app
For more information about these strategies, take a look at 4 app monetization strategies for free apps, a sponsored post appearing on VentureBeat.com. What we like about this article: it offers multiple scenarios about when a particular strategy might be the right one for your app.
Another useful article appears at Forbes.com: How to Monetize Your App: Banner Ads Vs Native Ads vs In-App Purchases. You may have thought – as we did – that banner ads were on their way out. But, this article paraphrases Mark Twain, saying that “reports of the death of the banner ad are greatly exaggerated.”
Finally, consider reading this Localytics.com article for an even more in-depth look at app monetization strategies and their pros and cons: App Monetization: 6 Bankable Business Models That Help Mobile Apps Make Money.
More about GrowIt!
Mason and his partner Seth Reed both have horticultural backgrounds, with Mason majoring in agricultural sciences with a concentration in applied economics and management at Cornell University in New York. He began working at Ball Horticulture in Chicago, along with Seth, where he has worked on social media promotions, account planning and new product releases. Ball Horticulture specializes in plant development and distribution.
Then came GrowIt!
The goal of the app is to help people – especially millennials aged 20 to 35 – find the flowers, vegetables and herbs that fit both their locale and their lifestyle. People who know and love plants (including those in the retail business) can upload photos of plants, along with their contact information, including links to their blogs.
Meanwhile, unexperienced gardeners can use the uploaded photos to identify plants that interest them and fit their needs, so that they can shop with confidence. They can also connect with other gardeners in their area; unlike searching on Google for photos of plants, GrowIt! only shows photos taken within 75 miles of the searcher’s location.
Photos can be rated by users, with this rating system going from worst to best:
- Leave it
- Like it
- Grow it
Mason and his partner tag the photos, making the app easily searchable – and so you don’t, as he says, “have to be a botanist” to get the right plants for your needs. They now focus fulltime on the user experience and design of the app, with the blessing of their employer, and they are taking the lead in marketing this tool, including a marketing launch at garden shows this spring and advertisements in tech-related publications.
The development of this app was funded by Ball Horticulture and they are encouraging Mason to focus on the app itself for now and worry about additional monetization later – which may cause more jaded readers to say that Mason had it easy as far as initial funding. But, the reality is that he followed key principles for business success, including:
- Becoming well educated in and knowledgeable about your field
- Gaining experience and networking with others in your area of expertise
- Partnering with others who share your vision
Will following those principles guarantee success in the crowded app world? Of course not – but you’re much more likely to find success WITH them than if you skip over those steps and just hope for a miracle.
Entrepreneurial advice from Mason
He participated in a study that we conducted in 2014, where he identified three key traits for entrepreneurs:
- Passion: “Having an idea for the sake of having an idea or because you think you can make a little money won’t get you out of bed in the morning. You have to be able to stand behind what you’re doing.”
- Audacity: “No startup ever took off because someone sat there and said nothing. You have to take risks. It’s all about being seen. Talk the loudest, swing for the fences, and speak before being spoken to.” He adds that “build it and they will come” only works in the movies, so he wears his brand on his sleeves (both literally and figuratively), starting up conversations in elevators and otherwise breaking through the countless distractions of the day to bring about awareness of his product.
- Time management: “There are a lot of shiny objects when starting a new venture. You have to figure out quickly which ones are worth your effort or soon you’ll be wasting time during the most crucial period.”
“It takes boldness and brass to be a real entrepreneur,” he adds. “It also takes the ability to change and learn. Having an idea doesn’t make you an entrepreneur. Having the will to get up and pour yourself into your passions until you exhaust yourself on a daily basis is what makes an entrepreneur.”
GrowIt! is available via the iTunes store for operating systems of 7.0 and later, and through Google Play.