How to Became an App Business Owner and Make Money

Getting laid off from your job is a crushing shock, but I was lucky this time. On a whim doing some hobby type experimentation, I had already posted a few apps for sale in the iPhone app store. To my surprise, they were quickly bringing in significant money. In fact at the time I got laid off they were already bringing in nearly $3,000 a month in profits. My apps were simple but they made regular money, so I figured all I had to do was lather, rinse and repeat to grow my income. My first day off work I headed down to the Apple Store to buy a brand new Mac so I could begin expanding my business. Within a few months of being laid off I was able to replace the income I had been making as a physicist working fulltime. While my life seemed more uncertain, I had control over my time. I could take off and go hiking or whatever, whenever I wanted. I answered to noone except my customers. I could get up as early or as late as I wanted, and it quickly became clear that getting laid off was a blessing in disguise.

Back then the app store was a simpler place. For starters there were a lot fewer apps in the store, and big players were just beginning to take the mobile space seriously. Add to this the fact that the app store allowed for easier app discovery than it does now. These factors created a situation where if you put up a halfway decent app that targeted a niche or was useful, and you were pretty well guaranteed to see at least some money from it. When I first started, I was making iPhone apps that only brought in $300-$500 in profit each. But make 10 of those, and you've got a $60,000 a year income. Soon enough I hit on a couple that were making thousands a month, and you get the picture.

Well since then you can sum up the app store with one sentence. Things have changed. The app store is crowded with more than a million apps. Competition between mobile platforms is fierce, and large companies are throwing their weight around the app store. Large app makers are willing to sue independent developers over a trademark infringement claim and unscrupulous developers are willing to copy your work to make a fast buck. On top of swimming with all those sharks, add to that changes Apple constantly makes to the store like removing the "new releases" section, making it harder for apps made by smaller developers to be seen. The end result is you have a mix that's a lot tougher than it was even just a few years ago. But don't be discouraged - despite these changes the app store remains a great business opportunity. With a little preparation and good management, you can build a successful business and maybe even strike it rich.

In the early days even before I got involved it really was a kind of wild west/gold rush atmosphere. You've probably heard about the game iShoot, which made its developer rich in the blink of an eye, as described in a Wired article:

Apple’s iPhone application store is as crowded as a Beyonce concert, with more than 20,000 apps available. But one independent developer still managed to rake in $600,000 in a single month with a single iPhone game.

These days, with the app store as crowded as the city of Chicago rather than a small Beyonce concert, instant success is going to be harder to grasp. That being said an app business has huge advantages:

Starting an app business is a low cost endeavor compared to most other types of businesses
  1. It's easy to retool and bounce back from failures
  2. It's still a growing market and likely to be for some time
  3. You can grow your business without investing much if anything in advertising or marketing
  4. People can't seem to get enough apps, so you can supply them with new ones
The iShoot type of success is still possible - if you're clever enough to come up with a unique idea. But even if you're not, with a little preparation you can build a successful business. Let's get started.

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