Apple reinvents education?

January 25, 2012

The release of educational platform is a strong move by Apple. Not only it’s a market that hasn’t seen any significant innovations for years. Getting young people hooked on theĀ  iOS platform early is a great way to ensure they’ll be willing to buy Apple stuff when they grow up. However, it might be a bit too soon for Apple to celebrate. I expect the same move by Amazon in a few months. Eventually they will ship a better tablet than their current Kindle Fire is, and with the clout they have among traditional publishers, they’ll be able to grab the lead in tablet-based educational market.

Amazon is becoming a super-monster company of the new age. Their cloud services were basically the first large-scale commercial cloud available, and it seemed to be a bit weird for them to move into it. These days, after their strong tablet debut, it won’t surprise me if Amazon releases a personal cloud platform (think gmail and Google Docs), a browser (take Chromium), a search engine (becoming a commodity too), ad platform (hello AdWord). This all can happen thanks to their deep penetration into consumer market and democratic (think cheap) pricing. Now this is a threat that Google might not survive.

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New MobileNoter SE for Android tablets tutorial video released

November 9, 2011

The new MobileNoter SE for Android tablets is awesome. People are not just saying that, they are also putting their money where their mouths are. Here is the tutorial video:


Catch tries a different strategy

October 6, 2011

I used to say that Catch (a note-taking application) repeats everything after Evernote, but turns out that’s not true anymore. First, I noticed that Catch under Android is much better than Catch for iPhone. Despite a recent update of Catch for iOS, it is still pretty basic. Nothing has changed much since I reviewed it in March 2011. It’s a totally different story for Android. Not only Catch for Android is better looking and has a bit more features. It comes in several flavors too!

In addition to the main Catch Notes application, the guys released I Journal and AK Notepad. These are simply downgraded and differently skinned clones of Catch. While this approach is nothing new, it is mostly used in the game space. For example, most of the Alawar’s games are re-skinned time management and 3-in-a-row games. It is quite innovative to see this in the productivity application genre. I’m quite interested in seeing more Catch offsprings and whether or not this strategy leads to more paying customers in the future.

 

 


Why app stores are evil for business software

August 14, 2011

App stores have been around for a while, and our company has been selling MobileNoter through all major ones: Apple Appstore, Google Android Market, and Amazon Android Market. We know a thing or two about app stores, and the most important thing we know is that they are totally unfriendly to the business software vendors. I will use “business software” in a loose sense here – basically, everything that is not entertainment and doesn’t cost a buck or two apiece is considered as a business software in this post.

1. App stores hide buyers from vendors. While staying anonymous is cool when one buys iFart app or perhaps another countless “3-in-a-row” clone, this is not the case for the business software. First and foremost, it is going to be harder to provide support to the customers. It is harder to identify whether they are your customers at all, what software they bought, what version they are using, and so on. It is also harder to do cross-selling and up-selling. You can’t send an email to the customers saying “You have our software for iPhone, we have a new version for iThing too”. What app stores should do: they should allow for opt-in email sharing by the customers. If a customer wants to share her email with the vendor, she should be able to just do that without any hassle.

2. App stores have terrible pricing structure. They don’t have discounts or coupons issued by the vendor, they don’t have volume discounts, they can’t sell upgrades to the applications, and they don’t allow packaging your goods and services, for example offering a premium support plan for extra money. All these things have been used by the business software vendors for a long time. One would wonder why major app stores can’t implement these things. The only thought that comes to mind is that they are only interested in selling entertainment stuff. What app stores should do: they should implement flexible pricing structures similar to those of Plimus and other eCommerce infrastructure providers.

3. App stores don’t let a free trial (with the exception for Google Android Market, where developers can use in-app purchases for that). Business software costs anything from $10 to 4-digit figures and few people are going to just cough up this kind of money without seeing what they are getting first. What app stores should do: pretty obvious.

4.The 30% cut is not justified. App stores shouldn’t be THAT greedy. It’s OK to take 30% off $0.99 purchases because the transaction costs are high and because the impulse buyers are the main drivers of sales. It is a totally different story for elaborate and expensive software. These apps require out-of-the-app-store marketing, because they are rarely going to be in the app store top lists and the app stores’ search capabilities are dismal. The 30% cut is a good deal when compared to the brick and mortar stores, when you sell software in a box with a disk and a printed manual, and it is sitting on a real shelf. Ain’t these times gone forever? What app stores should do: they should implement a straightforward structure where the cut is reduced the higher the price of the software is.

5. Lack of payment options. App stores only know the credit cards. The other 10 ways of paying are unknown for them. An enterprise buyer is likely to demand an invoice, to pay with a purchase order, and so on. Again, this is not going to be a problem for a cheap one-time-run app. What app stores should do: again, pretty obvious.

What the business software vendors should do: the only way currently available is to move your software into SaaS territory. If you claim that you provide a service, then you are free to sell it on your website, gather customers’ emails, provide flexible prices, offer a free trial and don’t give a leg and an arm to the greedy app stores. A lot of companies are doing this at the moment. However, it would be more convenient for the users if the vendors didn’t force them to their websites. Sometimes the app is not very suitable for the SaaS model, and strange things can happen along this route. Second, the app stores still can change the way they are treating SaaS. When the Apple Appstore introduced subscriptions a few months ago, it scared shit out of many SaaS providers, because for a moment they thought they would be forced to part with 30% of their money.

Is there any hope? Actually, I think there is, at least for Android. With the two major app stores and smaller (carrier operated) rising, it creates a place for competition and this will push the pressure on the app stores to improve. At least, that’s what the theory says.

 

 

 

 

 

 


Google Android market vs Amazon Appstore for Android

July 2, 2011

Update: as of November 2011, our Android version of the app outsells iOS version of the app.

Since our release of MobileNoter SE into Amazon Appstore two months ago, our sales have been growing steadily, but one thing remains the same: Google Android market outsells Amazon Appstore by 10 times. In other words, an application that brings $10K of monthly sales in Google market will sell for a total of $1K in Amazon market.

The ratio is pretty accurate, because we sell exactly the same application, and we don’t have any marketing or PRĀ targeting specifically any of the markets.

And from the Captain Obvious department: both of these markets, even combined, are still being dwarfed by the Apple AppStore sales.


Anatomy of a Groupon deal

June 26, 2011

A typical receipt on a Groupon dealI decided to write about the latest and hottest startup ever – Groupon (or Grouponzi, as they call it), but this whole thing with Groupon is too complicated and getting out of control. So I will make a few short posts instead, covering only the most interesting facts. Let’s start with what a Groupon deal is:

1. A Groupon sales rep talks a merchant into a Groupon deal. This could be a toy store or a cafe, or a service like house cleaning or educational courses.

2. A typical deal is to give customers a coupon for 50% discount (sometimes more!). A customer pays say $20 to Groupon to receive a coupon and later can use the coupon at merchant to purchase up to $40 of goods or services.

3. Groupon typically takes 50% from the coupon sales and pays 50% to the merchant. This means that the merchant is paid $10 for something that they would typically receive $40 for.

4. Coupons are valid for a limited but prolonged time, like 6-12 months. The 50% off the coupon sales are paid to the merchant using the following schedule: 1/3 of the amount in 5 days, another 1/3 within 30 days, and the remaining 1/3 within 60 days. So this scheme may look like a loan to a business: Groupon gives a business money now to serve a bunch of customers for a year.

5. There is no way to exchange a coupon for money, and if a coupon is not used, the customer doesn’t receive her money back.

The benefits of this deal to the customers are obvious – they enjoys huge discounts. What about the merchants? The promise is that it’s a great marketing: you have an effective way to issue coupons and bring new customers, growing your business. Well, a lot of things may go wrong.

1. Many of the customers who walk in the door are your existing customers. It is a terrible idea to give a 50% discount to your customers (unless you are into fake pricing) alone, but you don’t even get to receive the remaining 50% – you receive only 25% after Groupon takes its share. There are evidences where total up to 90% of Groupon visitors were existing customers of the merchant.

2. Many of the customers don’t spend more than their coupon’s value is. Consider this: a guy buys a $20 coupon for $10, goes to a shop with the coupon to grab something for $10 and receive $10 in change. So, the merchant just gave away a product priced at $10, also gave away very real $10 – all this for a $5 received from Groupon. If it sounds like the merchant was screwed, it’s so because it just was.

3. A lot of customers demonstrate abusive behavior, like they tip off discounted check or don’t tip at all, they try to repeatedly use the same coupon several times, and they threat to write derogatory reviews on Yelp if anything is not to their liking.

No wonder some merchants find that a Groupon deal brings them a loss of $10,000 or more.

 


Dropbox uses social game tactics to increase virality

May 5, 2011

famous dropbox logoDropbox is one of the best known applications in the world that appeared in recent years. While Dropbox is really useful and a great app, perhaps some creative marketing helped it to go all the way to #1 file sharing app in three years. It turns out that Dropbox cleverly utilizes the same tactics that is commonly used among social gaming companies on Facebook and other social networks.

For example, once you sign up to Dropbox, you are offered to perform 5 of the following 7 steps to get 250MB of storage space for free:

  1. Take the Dropbox Tour
  2. Install Dropbox on Your Computer
  3. Put Files in your Dropbox Folder
  4. Install Dropbox on Other Computers You Use
  5. Share a Folder with Friends or Colleagues
  6. Invite Some Friends to Join Dropbox
  7. Install Dropbox on Your Mobile Device

Compare this to the 5 steps that Office Wars – an addictive Facebook game – asks to do in order to become an “Office Wars Pro” and get some perks for free (that otherwise would have to be bought for real money):

However, Dropbox doesn’t stop with the list above. More simple actions will get more free storage to the users, like:

  1. Linking Dropbox account to your Facebook account
  2. Following @Dropbox on Twitter
  3. Tweeting about Dropbox to your followers

Every step of the above will get you 128MB more. All this is on top of the “old school” marketing gig: any new user signing up to Dropbox off your referral link would add you 250MB of storage space for free.

It is very easy for Dropbox to utilize this tactics, because they can give away free space in small increments for just about anything: if you Like their page on Facebook, write a positive blog review about them, put Dropbox sticker on your laptop and post a photo of it – the possibilities are endless. It is much harder to do the same for a company that sells software for a one-time payment, like we sell MobileNoter SE. The company could give users discount coupons for the user actions it want to appreciate, but even this is not guaranteed to work – the biggest application store – the AppStore doesn’t support coupons.