Making apps is fun, but flipping burgers pays better

It’s a weird situation.We created an app for bookmarking places, called Rego, in response to the surprising lack of decent bookmark management in Google and Apple Maps. We thought Rego would be a success, since keeping track of and doing interesting things with places seemed like something relevant to most people who carry iPhones. And with a billion people in the App Store, we’d do fine just selling to a small portion.

Well, it turns out that only a very—very—small portion of those people have bought the app.

People who buy Rego love it, and discover all sorts of interesting ways to use its versatility. One guy journals his travels. Another tracks her photo shoots. And yet another tracks drilling locations in Kuwait! Almost all our App Store reviews are 5-stars, and gushing with praise.

But if I divide our development time by the revenue we’ve made, it works out to an hourly rate of about 1/4 of minimum wage. That’s right, we’d do better financially—much better—flipping burgers at McDonalds. And since we pay our software engineer a bit more than minimum wage, Rego is quite a money loser.

So why do we continue? That’s a good question, and one I myself ask a lot.

I guess we do it for a couple of reasons. There’s the feeling of commitment to those who have bought the app. There’s the joy in seeing how happy people get when we add features they like. And there’s the fact that we use Rego ourselves.

But it’s clear to most developers by now, that just putting an app in the App Store rarely leads to much. Rego was featured on the App Store front-page—supposedly equivalent to winning the lottery—but that only led to a week’s worth of decent revenue. After that, incoming purchases went from flowing, to something better described as dripping.

Perhaps we shot ourselves in the foot by making it so generic. That was actually a design goal, but it turns out a similar product focused on “places where you’ve pooped” has sold thousands more than Rego.

Rego addresses a need many people don’t realize they have. As geeks, we always thought, “Wouldn’t it make sense that you could manage a database of places on your iPhone?” But that’s never occurred to my mom, or any of her iPhone-toting friends. They never search for “location bookmarking” in the App Store.

And we probably didn’t do ourselves any commercial favors by focusing on privacy. Foursquare, which can do similar things as Rego, went social and benefitted from the network effect. But, dammit, I don’t want the world seeing most of my places, and so privacy was a fundamental objective of Rego.

Finally, we probably should have looked for a subscription-based business model for Rego. It seems almost self-evident that you can’t sustain a business based on a fixed per-customer lifetime revenue of $5. (This could segway into a long discussion of why Apple needs to support paid-upgrades, which is how the software industry has traditionally realized recurring revenue, by releasing paid upgrades every few years.)

So at the end of the day, we’ve put a lot of effort into a product that we, and many customers love. But it doesn’t earn enough to pay the bills, and leaves us in a situation in which improving it becomes a labor of love, and economically limited to incremental enhancements. And even then, it can be hard to justify the effort. We’re soon going to add GPS track support, which will require about a week’s worth of effort, and I consciously avoid thinking about what that’s going cost.

Major features like iCloud syncing, whose effort would be measured in months, instead of days, can only be considered on the very long-term roadmap, and performed as activities on which we chip away slowly, as from necessity we spend the majority of our time in consulting and product work that can generate enough income to keep the lights on.

I decided to post these thoughts as something I can refer to in the future, after having repeated myself so often to people asking about our pace of development, or urging us to add complicated features. Hopefully it’ll shed a little light on the situation.

PS: For those reading this article because I sent you here: Before getting upset that Rego doesn’t do a particular thing you want, please remember that there’s an infinite number of things Rego could do, and every one of those possible features would have a cost associated to it. You exchanged the financial equivalent of about 5 minutes of your time, for something that has taken us years to develop. If you wrote down every feature Rego supports today, that list would run into the hundreds. It’d be hard to argue you didn’t get your money’s worth.