The Long Tail of making money

As recently as 4 years ago, if you were a software developer or a website owner, your options for making money were pretty limited:  you could either build a full size, full system based piece of software (think Anti-Virus protection or word processing software, etc.) or you could build a website and slap advertisements on it.

The advent of the smartphone, particularly the iPhone and Android, have made it possible for hobbyist and part time software engineers (in addition to full time folks) to quickly sell their wares and make real money.  Instead of earning a dollar a day through Adwords clicks on a blog, a person with even a moderate amount of skill can make 10 dollars a day selling his iPhone app.  Maybe its not much money, but the time and cost of developing an iPhone/Android application is substantially less then developing a browser-based or system-based application.  As a result, the sales price is lower.  And lower prices = more impulse buys.  Combine that with the fact that both Apples App Store and Android’s Market are easily accessible and searchable from the device themselves and a person could make a nice chunk of change developing lightweight, useful, and simple applications.

Here’s the math:  let’s say you can develop an iPhone application in one month that will sell for .99.  Let’s say the app will sell 10 times per day, earning you a modest $10 (rounding up) per day once it is released in to the wild.  ANd let’s presume that maintaining the application will be easy and essentially require no more then 10 hours a year of coding to keep current.  And let’s also presume that you build and release one app per month for a year.

Month 1:  $0 dollars, 0 apps, 1 app in development.

Month 2:  1 app released earning $300/month (roughly $10 a day), 1 app in development.

Month 3: 2 apps released each earning $300/month, 1 app in development.

So on and so forth til after one year, you have 12 applications earning you $300 each, or $3600 a month.  Multiplied by an entire year and you’ve created $43,200 of income for yourself, which is basically the same thing as the USA’s median household income in 2004.

Are those numbers attainable?  Conservative?  Aggressive?  I have no idea.  I imagine any app that would sell 10x in a day would just as easily sell 100x in a day if it caught on but who knows.  At the same time, its possible that a lot of apps never sell more then a few dozen copies to friends and colleagues simply because no one knows they exits.

Regardless of the math, the point is that the “Long Tail” of old (lots of blogs with low readership) has been replaced by the “Long Tail” of new, which is LOTS of people, companies, partnerships, hobbyists, and amateurs delivering workable applications (instead of static content) and making a buck.

Interesting times ahead.

One Response

  1. This is a valid concept, and I call it Micropreneurship.A Micropreneur is a developer who earns money from many small apps instead of one large one.

    Your example, however, overestimates the average success of any app, including an iPhone app.

    First off, you’ll be lucky to sell 30 copies in a month, much less 300. With 125k+ apps in the store now, the long tail means you sell a handful of apps if you are lucky.

    Next, are you working a full-time job while building these apps? If so, then you’ll be hitting it hard to get 15-20 productive hours per week in, meaning you have to develop the app in 60-80 hours. Total. From concept to launch into the iPhone app store. Every line of code designed, written and debugged. It’s extremely aggressive to think you can build 12 apps in 12 months in this little time.

    Finally, building an app tends to be around 30-50% of the effort it takes to launch an app. Beyond that there’s documentation, support, marketing. So if you spend 60-80 hours, assume you’ll spend at least that on these other tasks. And as you launch each app you will have a support/marketing burden for those apps as well.

    You can outsource some of this to contractors and VAs, but then you reduce your bottom line. And let’s be honest; it’s hard to live in a major city in the U.S. on $3600 per month unless you are single and live with roommates.

    With all of that said, the concept you’ve mentioned exists and works. I own 10 software products/web applications/websites that together provide a full-time income. I am a Micropreneur.

    Thanks for the thought-provoking post.

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