Sparrow Acquisition and Mobile App Pricing Models

Sparrow

Sparrow, the much loved email client for iOS has been acquihired by Google. Congrats to the Sparrow team. Bad news is there will be no enhancements to the Sparrow app itself. The team will work on other projects at Google.

Sparrow Acquihire Reactions

Reactions from the internet ranged from how Google might have wanted to get Sparrow’s design skill to lend a hand on a Gmail client perhaps, or wanted Sparrow like app for Android and so on.

The reaction that I liked was from Nilay Patel, he talks about how Apple should support In-App subscription pricing models for apps.

An app developer can only charge a one time price BEFORE the user has experienced the app. This price must be low enough not to scare away users, yet high enough to pay for the operations of the business. In the productivity app space, we are seeing more of the former, not the later. (a) I only paid $9.99 for Sparrow years ago and yet it has added a lot of value to my life.

Subscription pricing for apps is an important point and am surprised its not getting much support from iOS developer community.

Popular Mobile App Pricing Models

One-time payment is the second most popular mobile app pricing model. Free is obviously the first approach. The monetization strategy for free apps are i)in-app purchases for additional features ii) Advertisement supported iii) Monetize through a primary app, on say PC or elsewhere, and subsidize mobile app.

Of course am not accounting for apps that are supported by factors other than revenue. Social media apps fall under this bucket, they use our collective attention to determine our interests and use these signals to serve advertisements etc.

Why subscription pricing for mobile apps?

Most pre-iOS mobile platforms were quite lame to build professional apps on. The iOS platform and then Android, and perhaps Windows Phone, changed all that. It is possible to write games on these platforms, leave alone business apps. Most functionality like email clients, games or simple productivity tools, requires minimal server infrastructure to keep running. So its possible to build a decent mobile product by adopting an one-time pricing model for these apps. Start with 0.99 cents to whatever $$ you can charge and be done with it. Assuming the app did sufficient numbers, developers can sustain themselves and perhaps even be profitable.

Some Problems Need Processing Power!

But the one-time pricing model does not always work. Especially if there is a server component that supports the mobile app functionality, and server components are not cheap to build, monitor and maintain. Why bother with a server at all? Well, if you are doing any significant feature that involves large data processing, it has to be done on the server rather than a mobile client. Without a server component you are limited by the kind of problems you can solve. Let me reiterate

This is not about pricing models but about the class of problems you can go after sustainably.

This would be no big deal if the iPad and its Android clones had not been around. With tablets you could do much more but the pricing model constraints are a serious roadblock. AppStore pricing restrictions are artificial constraints on the tablet ecosystem.

Options for Subscription Pricing

And if you want to focus on a purely mobile app then you have few options i) Charge heavily one time, and hope you do enough volumes ii) Adopt in-app purchases for new features, might not fly because of first point, which Nilay has pointed out too iii) iii) Adopt in-app advertising, might not work for non-consumer apps because of volumes iv) Or hope you get VC funding to subsidize the whole thing and look for exit via an acquisition!

Obviously none of the above options are desirable.

Web + Mobile Combo

Before you say anything, I know a web + mobile app combination will let you out of this conundrum, since pricing model on the web-end of the equation can be controlled. Issue here is your development costs just shot up. There are two apps to design, build, test, deploy and maintain for! Let us not even get into whether the product would be relevant on a non-mobile scenario.

With subscription pricing enabled for apps, Apple can truly realize its vision of a post-PC world. Right now, developers need to straddle PC and Post-PC worlds!

Why do I care?

Why am I getting all worked up about Sparrow and in-app pricing models? Well, for CollabLayer, the first product being developed by my startup Tataatsu, we have struggled with this question a lot. While CollabLayer will be on all platforms eventually, we could have gone to market with an iPad app first. But pricing model restrictions force us to build the web-app too, which of course delays everything.

Apple, help us realize your, and our, vision of  a Post-PC world, enable in-app subscription pricing!

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ReWire, Weak-ties and Serendipity

Rewire

ReWire is an app to help train your attention/concentration skills. ReWire is the first product that my startup developed and it is out on the AppStore. I say developed because the idea and spirit was the brainchild of Mike Redmer, we only played a technical role. Anyway, the topic of this post is how this partnership between Mike and I came to be. And you should check out ReWire, it’s an awesome app which is sort of obvious given its pedigree..well you surely don’t expect objectivity from me on this 🙂

ReWire Day Zero

It was many months ago, I was lazily reading through some blog post and monitoring twitter. The question occupying my thoughts were around which idea to focus on in the startup I had launched. It was the typical problem of plenty, when you could choose anything to work on what do you choose? Of course the standard questions around technical feasibility, resource availability, monetization concerns were all there but still its a tricky question to answer.

Given the set of people I follow on twitter there was the usual mixture of technology, spirituality and hindu nationalism related tweets that were flying past. In case you did not know, I follow a lot of Buddhist practitioners on twitter. Like thirsty men who drink from every available stream, I too dig into every path to see if there is an insight or technique that will refine the animal within.

Weak-ties

As tweets were whizzing past I noticed a tweet that said, and I paraphrase, “Looking for iOS devs to help build a meditation app“. That held my attention immediately but the tweet was from nobody I knew. It was a retweet by Vince Horn. Vince, if you do not know, runs the Buddhist Geeks podcast, of which I have been a fan for long because of the sincerity and insight with which he conducts himself and the show.

Serendipity

I could not resist, and replied to the tweeter saying our fledgling startup could lend a hand. Of course I also told him we have built products before but not on iOS and not within our startup itself. There were tons of unknowns between Mike and our firm. The funding situation, the scope of work involved, our relative inexperience on iOS platform and more. But we barged our way through based on trust and common spiritual interests. Staring with a simple proof of concept we did several iterations to get to a mature beta. As mentioned at the top of this post, the app is ReWire and it got approved by Apple early in the day today.

It is an amazing feeling to see this little app go live. It is such insignificant thing in the larger scheme of things but very important to me and Mike because of the way it came about and how we have grown as people by learning from and trusting each other.

Looking back

I think this is a good example of serendipity enabled by weak-ties. You don’t think so? Well, imagine I have to be a technology person(to have the courage to think I could build it on my own if I can’t hire an iOS developer), I need to have the freedom to work on what I want(which essentially means a startup or some free time if working full-time elsewhere), I need to have interest in spirituality and follow Vince Horn’s Buddhist Geeks podcast and I had to watch the twitter feed at that exact moment in time. Damn..that is near impossible right! Yet, here we are.

I can’t help but be reminded of this quote by Steve Jobs.

You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever.

Credits

So Mike, if you are reading this..awesome work and thanks for trusting us with ReWire. You have a unique vision on how technology can help contemplative practices, so keep plugging away!  And to my wife and family who give me support to even attempt this, a big thanks.

Finally to those few who answered my call, “who will come with me, who will walk with me“, you have my gratitude. And yes, we are taking this baby places.

[Note: Our primary product is still in development. We can’t wait to show you what it does. We believe it will simplify how people collaborate with each other and help catalyze serendipity, just as I described in this post. Subscribe to this blog or register your email at Tataatsu to hear more on our progress.]

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