If you’re reading this you’ve probably asked yourself this exact question more than once. After, all, you can hardly roll out of bed these days without seeing news of a new huge tech company making money.
Heck, we just wrote about Facebook’s newest success and we woke up this morning to see a new tech billionaire has risen with the Social media giant: Kevin Systrom of Instagram cleared that golden benchmark, joining the ranks of notables like Rudy Giuliani, Warren Buffett – possibly even one of our presidential nominees.
But there’s the darker side of the tech industry that we don’t talk about as often as the newly minted billionaires. The fact that tech startups have traditionally based in places like Silicon Valley (where SDI itself maintains its HeadQuarters) also means mass emigration from rural areas.
But here’s the thing – that’s no longer really true. App, web, and software companies have a distinct advantage: as long as there’s internet, people can work from anywhere. More importantly, many states across the US have taken notice of this.
States like Washington and Minnesota have sought to encourage online businesses by offering incentives and tax breaks to SMB tech owners – and what business owner doesn’t love tax breaks?
As rural internet infrastructure improves, getting your online home business out there will become even easier. But the advantages of running an app business extend beyond tax breaks and working from home.
A Tech startup doesn’t have to be what VC’s and Angel Investors call a ‘unicorn,’ – or tech startups worth over a billion dollars. DOn’t get me wrong, a billion dollars would be nice, but I think it’s safe to say most SMB owners just want to have enough money to be happy.
Which is why the app and web business provides such a vast opportunity for the average joe. Think about the hurdles that existed to have your own business as recently as 1990: storefronts, employees, utilities, health insurance, and so on.
Starting a business in the 90’s was a difficult enterprise. It required a lot of money, the right location and a local, sustained consumer market. Today, none of that is necessary.
Sure, you could invest hundreds of thousands in an app business. But just as possible is investing a couple thousand dollars – trust me, you will make your money back and more. For a minimal investment, you could be looking at your own game app in 4 weeks or less!
Look, people aren’t going to give up their phones any time soon. If anything, apps like Pokemon Go prove that the app industry is just getting started. We’re on the cusp of a Mobile First revolution – one that will mean piles of gold for app owners out there.
It’s an entrepreneur’s dream – a world where consumers are constantly connected to your mobile storefront – or game, or whatever service your app may provide. The here is that no matter where someone is, they can reach your business, and purchase your products.
Why don’t we discuss two types of apps where the clever entrepreneur can make some cash: mCommerce apps and mobile Game Apps.
How to Make Money with a Freemium Game App
Freemium game apps are all the rage right now (again, Pokemon Go!), but people often question their ability to generate a revenue. But the truth is that game apps, especially the burgeoning market of AR game apps, make a lot of money.
More than making money, they’re kind of the perfect vehicle for continual user engagement. Game apps speak to the addictive side of consumers; people love to play games. Whether that means interactive games for couples, or just single player games, people love game apps!!
By placing paywalls at certain progression levels, it’s easy to convince gamers to drop a couple bucks to get the next level, or character, or any sort of achievement. People are far more likely to spend some cash when they’re already invested.
Prefer more subtle revenue generation strategies? One of our favorite methods is not actually to put progression paywalls up. Instead, by increasing difficulty with each level or achievement you can force in-app purchases that can make the next achievement easier.
Another favored strategy: Offering bonus levels or new items that improve or broaden the level of play. And we’re not just talking about games like Clash of Clans.
Take a look at the game app Kim Kardashian: Hollywood for instance. By offering users new areas for purchase, you could generate a tidy little sum. How much, exactly? Well Ms. Kardashian made $40 million off her app last year
mCommerce Apps and the Future of Retail
No Doubt you’ve heard plenty about eCommerce websites and their success – and it’s not exaggerated. eCommerce sites make money. Simple as that. Plus with eCommerce frameworks like Magento, entrepreneurs can build a website in as little as 2 weeks – and not break the bank doing it.
But in the era of Mobile First, eCommerce is grandfather playing with teenagers. It can still play, but keeping up is getting a little harder every day. Apps for mCommerce are a growth market and will probably become the primary method of shopping for most of the US by 2020.
Already, mobile traffic on the web exceeds desktop. Economists believe that the online retail sales will pass $400 billion in annual revenue by 2018. While Brick-and-Mortar retail sales still account for 94% of sales, that is going to change. Guaranteed.
Already, almost 75% of Generation X and Y research a product online prior to purchasing. 66% of all shoppers research a product on their phone while in a store. Any way you slice it, mCommerce is going nowhere but up. And up, and up!
Ready to get your own tech startup off the ground? SDI’s development experts can build an mCommerce app or game app in 4 weeks or less. Give us a call at 408.802.2885 / 408.621.8481 – or click to contact us!