Failure: Building a web app that makes $50/month

http://tbbuck.com/building-a-50-dollar-a-month-web-app/

by mootothemax • 15 years ago

152 58 15 years ago

tbbuck.com

mootothemax14• 15 years ago

Hi everyone,

Tom, blog author here. If you have any questions, I'm here to answer them :)

Edit @1900 GMT+2: I have to run out for a bit, but will be replying on the train and then once I'm back again :)

uberalex3• 15 years ago

Hi, thanks for an interesting article. I'm curious about the user experience they had -- did users use the tool successfully?

Do you have a measure of their average stay or actions?

I'd be interested to know if some arrived thinking it did one thing and ended up not getting what they wanted.

mootothemax14• 15 years ago

I'd be interested to know if some arrived thinking it did one thing and ended up not getting what they wanted.

You know how sometimes someone says something really obvious and you want to hit yourself because you haven't thought it through properly? Thank you :)

I've had a quick look through the stats, and users appear to be coming back repeatedly (no errors on the server - will try and see if there's anything else going wrong, e.g. IE6 problems). I think I'm going to try and find those cancelled users and ask them what happened :)

Tiomaidh• 15 years ago

The lifetime membership seems like a solid idea. It might also be worth charging, say, $1 to just use it once.

Regardless, though, $18/hr (($200 - $20 theme) / 10 hours) is not bad.

mootothemax14• 15 years ago

It might also be worth charging, say, $1 to just use it once.

I'm kinda torn on the $1 idea. Whilst I like it in principle, I think in reality it might attract customers who'll be a pain. At the same time though - I can always experiment and find out! :)

uberalex3• 15 years ago

I suspect $1 is too low, especially if the 6 month theory is correct. I imagine users more likely to pay 5 or 10 dollars because the perceived value of the product is higher, making it more attractive. I feel at $1 the user might think that the task offered isn't worth it.

base• 15 years ago

not a very good due to transaction costs.

mikle• 15 years ago

I think it would be easier to sell small products for 1$ if the web had 1-click purchases. I would not consider paying with 1$ using Paypal because it is about 3 clicks to buy something and I probably don't want to be bothered (Unless it's really essential I have it).

karterk2• 15 years ago

Thanks for sharing this experience with us.

1. When you mentioned about 1 or 2 users signing up randomly - what's your overall inbound traffic to your app like?

2. I am guessing you did not particularly do any paid advertising, except for submitting them to various directories, is that right?

mootothemax14• 15 years ago

When you mentioned about 1 or 2 users signing up randomly - what's your overall inbound traffic to your app like?

In June, the app's homepage received 1,344 unique visitors. It's typically around 40 a day. So yeah - conversation rate really isn't very good ;)

I am guessing you did not particularly do any paid advertising, except for submitting them to various directories, is that right?

Completely right; I don't know enough about paid advertising to be effective, so avoid it altogether. For now at least :)

karterk2• 15 years ago

Ok, it's interesting that just an hour of submitting to such directories can bring in such decent traffic!

> I also contacted lots of people on Twitter and asked if they’d give my app a try.

How do you do that? In past, when I have tried doing this using @replies on potential people who might be interested, I always felt like I was just barging in on a stranger!

thibaut_barrere2• 15 years ago

> My mistake quickly became obvious: I had built a tool for an audience that didn’t like to spend money.

The audience doesn't want to spend money for this specific tool but it doesn't mean they wouldn't spend money in general.

mootothemax14• 15 years ago

The audience doesn't want to spend money for this specific tool but it doesn't mean they wouldn't spend money in general.

I was struggling with the phrasing of that sentence for ages. But you make a fair point :)

thibaut_barrere2• 15 years ago

I just don't want people to "close their eyes on opportunities" as it's fairly easy to jump to conclusions.

Thanks for sharing your insights otherwise, appreciated :)

kgtm• 15 years ago

First of all, I would like to thank you very much for your posts, they are informative and have great value for emerging entrepreneurs.

Some thoughts I had:

* You are spot on in concluding that this is a tool that would be used a few of times in a year. A lifetime payment is the solution, with an appropriate price bump of course.

* Regarding the users that signed up for free: You should have allowed them to keep using the service for free. They are your implicit marketing team. They got in early, they deserve gratis access for that.

* Regarding the recurring scheme of cancellations: Do contact the users, ask them why they are leaving. This will help you either validate my first thought above, or iterate on the service to become what they expect to get out of it.

mootothemax14• 15 years ago

And thanks for your thanks - and also such great advice! :-D

A lifetime payment is the solution, with an appropriate price bump of course.

I'm now hearing comments like yours a lot, I think I might give this a try this weekend.

You should have allowed them to keep using the service for free.

You know what, you are totally right. I hadn't thought of it that way, and if I do something similar in future, I'll take the same point of view.

Do contact the users, ask them why they are leaving.

I'm right now figuring out a nice email with a "don't worry, this is the only email you'll ever receive from me" bit in it, to send to the relevant users. I think I'm being silly by not having contacted previous users about this.

Thanks once again for the awesome advice!

wisty• 15 years ago

Maybe a lifetime payment would be too expensive? Perhaps a $5.99 one month pass, and a $4.99 subscription would be better?

_pcpe• 15 years ago

I am afraid of the statement of "lifetime payment". May be because I am a newbie to Internet entrepreneurship but I think the ability of providing the opportunity to users to small payments for a specific time would result in more sales rather one time huge payment.

Tichy• 15 years ago

Confused: why would anybody want to delete their DMs?

liedra• 15 years ago

I was wondering the exact same thing. Is there a limit or something? If so I've never seen one.

dblock• 15 years ago

I think the issue is that it's a web tool and you're trying to make an app. Port it to phones, you'll get a lot of people buying it for 99c.

mootothemax14• 15 years ago

Port it to phones, you'll get a lot of people buying it for 99c.

Such a blindingly obvious idea, and it never even occurred to me. Thanks, I'm going to investigate this ASAP!

ma2rten• 15 years ago

I was thinking the same. The problem is that people don't like to get their credit card out for such a small payment (at least I would not). With an iPhone app, it's not such a big deal because your credit card is on file anyway.

watmough• 15 years ago

Damn, I was thinking the same thing too!

TweetMachine does look like a pretty neat webapp. I'm not a big enough Twitter user, but if I was promoting an app through Twitter, I'd certainly regard $20/month as likely a solid investment.

You might want to try and emphasize some approaches to app promotion and support in your features page.

cooperadymas• 15 years ago

Out of curiosity, why did you decide to make it a separate service from TweetingMachine? It seems like a natural extension of it. That being said, since you have both tools, I would consider approaching it in one of two ways.

First: give InboxCleaner away for free and use it to get registered users for TweetingMachine. I imagine if a user signs up and is happy with one tool you provide, they would be more inclined to pay $20/mo for another related tool. This seems like a great opportunity for some A/B testing as well.

Second: add InboxCleaner as a paid add-on for TweetingMachine. Your customers are paying $20/mo for the basic service, so you know they aren't afraid to pull out their wallets. Offer them a monthly inbox cleaning for an extra $1/mo. What's the difference between $20 and $21 when they're already paying you?

Also, your name might be inhibiting some initial click-throughs to your site. When I hear InboxCleaner, I immediately think email. Maybe this is because I'm not a heavy Twitter user, but it's something to think about.

One feature that might up the ante is email reminders to clean their inbox every 6 months or every year. It's something people will do probably rarely, which means they're likely to forget the name of the tool they used to do it or forget to do it altogether. You might offer a friendly reminder to do Spring cleaning on their inbox.

Anyway, I've really enjoyed reading your posts. They're some of the most practical real world case studies I've come across, as opposed to the "I'm making $2000 a week and only working 4 hours" drivel that's out there. Not that I wouldn't like to make $2000 in 4 hours a week.

mootothemax14• 15 years ago

Out of curiosity, why did you decide to make it a separate service from TweetingMachine

I was wondering if there were many users who wouldn't spend $19.99/month on a service when they only wanted one feature, and to see if they would pay $4.99/year for that one feature instead.

I am thinking about making it entirely free and using it to solely promote TweetingMachine. I might stick a TweetingMachine advert on it for a week and see if that results in any sign ups and go from there.

Thanks for your compliments by the way - I have a few "proper" failures I can write about in the future if you're interested. Although I'm also waiting for the magic $500/hour moment ;)

lez• 15 years ago

Don't wait for that time, enjoy it! After all it might be a few steps ahead.

Duff2• 15 years ago

How about adding a few features?

You're solving a infinitesimally small problem. Remember when GMail was missing a "Delete" button and people wrote greasemonkey scripts to implement one?

You're selling that for $5.

MicahWedemeyer• 15 years ago

No problem is too small to (try to) charge money for. Either they'll pay or they won't.

Duff2• 15 years ago

Oh totally true. But coming up with a few more tedious Twitter cleanup type activities might make it an offering that is more valuable to more people! (While adding minimal cost)

dpcan• 15 years ago

Interesting, thanks for the post.

1) I am surprised this is actually a problem that needs solved.

2) I see this more as a product that can be used for free by many and often, but it must promote your other products that you do sell. It could be a nice marketing tool maybe.

3) Couldn't you just roll this in with your other Twitter product that you charge for?

techscruggs2• 15 years ago

As I suggest in the comments: http://tbbuck.com/building-a-50-dollar-a-month-web-app/#comm...

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Try presenting your users with a paid and viral choice. First oauth them with the promise of the service you are offering. Then present them with the value proposition: "You are about to save X minutes by automatically deleting Y DM's". Then offer them two choices to compensate you for that value: 1) Follow your twitter account & tweet an endorsement (which could be as simple as a variation on the value prop ) or 2) pay you $0.99 for a one time service.

This will allow you to a) measure your funnel, b) advertise without spending any money, c) build an audience, d) use that audience to build a feedback loop and test other ideas, e) make money in a way that seems to align with your users usage habits.

Thoughts?

-----

What do yall think, could this dog hunt?

mootothemax14• 15 years ago

I've replied to you in the comments, but in short I'm conflicted between not wanting to pay for promotion (which a freebie is, essentially) but liking the idea of thousands tweeting about how great my app is.

Anyone reading that uses Twitter - would you pay or tweet to use a service? I'm guessing the vast majority would tweet... but am really not sure :)

awj3• 15 years ago

I'd be careful with that. Most people probably wouldn't try too hard to promote you, and "just tweeting so I can use this crappy inbox cleaner. bit.ly/asdf..." isn't really great promotion.

In general forcing viral activity both misses the point and fails to work. I'd say you should at most randomly give away free inbox cleanings to your followers / people who tweet about the service. Really, though, you should probably just be active on twitter and talk to people. That doesn't scale well, but it's the most effective viral tactic there is.

vessenes• 15 years ago

My three comments

a) Payment friction is a big problem here; reviewing comments, I love the idea of overcoming that with an app, but there are also other marketplaces like google chrome apps, etc. Nothing to say you can't sell a web app through one of those right now.

b) Don't email survey your customers, call them. Well, in your case, email them and say you're the founder, you want to know what they liked / didn't, and do they have 10 minutes to give you some advice? This will get you far more than automated surveys

c) I'm kind of thinking a nice "Before / After" with someone's actual inbox would be nice, then they could just click to pay once they see how great it will look.

code_duck2• 15 years ago

Failure is building a business that costs you $50 a month. At least you might break even.

Given the amazing apps and services out there for dollars a month or a one time cost of under $6, it does seem that you need to keep looking for the right sort of payment system for this product. I'd sign up to an amazing Twitter life management system for $5 a month, but not a tool that accomplishes one very limited purpose.

cadr• 15 years ago

What is a "Twitter life management system"

code_duck2• 15 years ago

Some fantasy unicorn of a product that I pulled out of a hat. I mean to say I'd pay $5 a month for something substantial. The product discussed is better suited to being part of a larger suite than sold ala carte for that price.

tomhallett• 15 years ago

why don't you make it free, have lot's of happy non-paying users where the objective is to convert a percentage of them to paying tweetmachine users?

mootothemax14• 15 years ago

It's an idea I'm certainly contemplating, thanks :)

billforsternz• 15 years ago

I like this idea. Something tiny and trivial (sorry) really makes more sense as a freebie. But I understand not everyone is into writing free software. So a model that makes sense for you and your users is that the freebie attracts potential customers to something that really justifies a monetary consideration.

usaar333• 15 years ago

" I made InboxCleaner free for life – just as long as you don’t mind being limited to only 50 deletes per day."

Perhaps I'm not the heaviest twitter user, but the free service would wipe every DM I've ever received in.. a day. I imagine a one-time fee would work better.

(On a related note, I wonder if Dropbox is also far too generous with their free offering; almost everyone I know uses the free tier as 2GB is a huge amount for docs that need syncing; I've used dropbox since it came out and am only at 20% of that).

Joakal• 15 years ago

Dropbox creates a hash identity for the file and compresses it in the cloud. So stuff like a song isn't uploaded or even stored twice. I assume it's still counted towards the usage.

nopassrecover• 15 years ago

I think the point wasn't about the cost to Dropbox so much as the opportunity cost (i.e. a lot more people would convert if the free package wasn't so good). Then again maybe if the free package wasn't so good, people wouldn't be such Dropbox fans.

localhost3000• 15 years ago

charge me $.99 every time i use it. no one wants to pay a recurring fee for something they use once or twice a year...or, more likely, once ever.

sixtofour• 15 years ago

I like the .99/use fee much better than the one-time per life fee mentioned in another comment. No offense, but I don't believe anything smaller than Google or Facebook will be around for a lifetime. If you're new, you've got a bit of surviving to do before I believe you'll survive.

xsive• 15 years ago

I'm unsurprised people are unwilling to pay for this service: InboxCleaner provides very little added value on top of a service which is free.

Further: it's trivial for a competitor to undercut your app with a free alternative. I suggest you give this away for free to (a) build goodwill and (b) attract people to your other products.

Another thought: you mess with your pricing an awful lot. If I was your customer, and recommending your product to my friends, I'd be pretty pissed to find out the price has changed and made me a liar.

jk8• 15 years ago

Thanks for the article Tom. Knowing that I could use a theme from themeforest has opened my eyes. I always get stuck when it comes to designing the front end part. I wish you all the best with your site.

Failure: Building a web app that makes $50/month

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