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business design innovation startups

Hey, Apple!

Hey, Apple, we need to talk about the App Store… Our relationship has gotten away from us. Things started great, I remember how Steve Jobs introduced us.

It started out simple: Free Apps, and Paid Apps. Paid apps pay a 30% rev-share and Free Apps are always Free. Steve Jobs, made it pretty clear and it was a good deal for a new platform that didn’t have many apps.

Things were good for many years. App Store was growing, Apple was promoting and advertising developers and apps. It was a great time to be an app developer, but things started to change.

The App Store Review process started to clamp down on developers. At first, it was for consistency with the platform, design guidelines, network consistency, and quality. But soon it started to be much more than that.

Apple started to reject apps that competed with Apple and started to enforce payment requirements on all digital apps that had subscriptions. At first, it was newspapers and magazines but over the years it has gotten broader and broader.

Many rejections are no longer for the benefit of consumers, it’s just for the benefit of Apple.

Applications from Netflix, Spotify, Audible, Facebook, and many more started to create features and experiences that were terrible because it was necessary to avoid paying Apple 30%. You’d download an app and you couldn’t do anything unless you went to a website to subscribe or create an account. For years you couldn’t use your audible credits to add books to your library because Apple wanted to compete with Amazon and take 30% off the top.

This terrible experience was a requirement if you wanted to avoid paying Apple 30% of your revenue. For many businesses that have smaller margins, this made it a requirement to create awkward free apps or limited apps that would then convert outside the app.

The App Review is a good idea – to provide a level of quality in the App store but the rules that are good for consumers are now confused with what is financially good for Apple. The App Store and Apple are very different now.

The promise of simplicity in the original app store isn’t there anymore. Apple isn’t helping market or sell apps the way that it did in the early days so the benefit to individual developers isn’t there anymore. It’s time to renegotiate the deal.

I’ve seen many businesses large and small get turned upside down because of reviews. The Hey email app being rejected recently is only the most recent battle. Apple’s platform isn’t an option for mobile-first companies, it’s table-stakes to compete.

Apple needs to look in the mirror and reexamine the relationship they want with their developer community. Do they think that Apple Pay and In-App-Payments should win on its own merits or if they should continue to strong-arm every digital business? Do they need developers to build apps anymore or should we go back to building web-apps? Does the App Store Review exist for the benefit of consumers or does it enforce an Apple advantage in certain businesses?

Hey Apple – I’ve been a fan of for many years, the app store has made me a lot of money and it’s made Apple into a trillion-dollar business, but the reason we loved Apple is that it symbolized the creators, the rebels, the misfits and trouble makers. As you think about iOS14 and WWDC- it’s time to reflect on your roots. Apple made products that wowed and we need to get back there. We need to rekindle the relationship. The AppStore is an amazing innovation but it’s gotten away from its roots. Let’s stop strongarming and let’s get back to making things that are insanely great.

Categories
business startups

How to pitch VC’s and Angels

How to pitch VC investors and Angels

Startups often have just a few seconds to grab the attention of an investor and make a memorable impression. I’ve seen hundreds of pitch decks from startups and most are missing the critical elements needed to make their pitch stand out.

The most important thing for a startup, getting ready to pitch is preparation. If you’re planned ahead and rehearsed you’ll already be ahead of the crowd. The best pitches and presentations require a lot of preparation and rehearsal. You often have just a few minutes to make a great impression so every minute of presentation may require several hours of rehearsal and preparation.

Most pitches are forgettable, they lack energy and they lack soul. What I mean is that they describe a business problem and a solution but they don’t make me care. Great pitches should convey the founders’ character, they should tell a story, connect with listeners emotionally, and be memorable.

When I’m listening to a pitch. I’m asking a couple questions:

  • Why you? – What makes you unique, what makes you as an entrepreneur special and why would I be excited to work with you?
  • Why this? – Most ideas and successful companies capitalize on unique ideas, timed with when the world needed them.
  • What makes this special? How will you compete with other entrepreneurs, what will make your business stand out in a crowded field of so many other companies?

Many entrepreneurs make the mistake that investors are interested in novel ideas or clever inventions. Nope. Investors are looking for great people and great businesses that have huge potential to grow. Your idea is a part of that but a great idea, without a great business and without a great founder, isn’t going to go anywhere.

If you’re putting together a pitch. There are lots of templates but the key things you need to include are pretty universal. Sequoia Capital even put together a business plan outline of the things that they like to see:

  • Problem Describe the pain of your customer. How is this addressed today and what are the shortcomings to current solutions. Make me really feel the problem.
  • Solution Explain your aha! moment. Why is it unique and compelling? Why is your solution better?
  • Why now? The best companies almost always have a clear why now? Timing is as important as the idea. Why hasn’t this been done before?
  • Market potential Identify your customer and your market. How big is the market and how will you capture it?
  • Competition / alternatives Who are your direct and indirect competitors. Show that you have a plan to win.
  • Business model How do you intend to thrive and grow?
  • Team Tell the story of your founders and key team members. Most investors don’t want to invest in solo-founders so tell the story of your team and how you work together.
  • Financials What are the financial models that support your story/vision. Don’t skimp on this, really knowing your financials helps investors trust you with their money.
  • Vision  – And lastly, and perhaps most importantly. If all goes well, what will you have built in five years? What’s the vision of the company? Paint a picture of how you get there.

In addition to these basics, you may want to include much more information. Don’t.

The point of the pitch deck isn’t to answer all the questions, it’s to get you to access to a deeper conversation with your investors.

It’s for them to lean-in and express interest in learning more. Resist having too much information.

It’s Ok to have your own notes or backup slides to answer deeper questions. This will help keep you focused.

There’s always more you can include in a pitch so you have to tune the deck and the presentation to the audience and the venue. For example, you should have several version of your pitch based on your situation.

The most common versions of pitches should include:

  • Elevator pitch – A well-rehearsed 1-2 minute conversational pitch that can be done with no slides.
  • Lightning pitch – 5 minutes (some visuals but not too much)
  • Emailed deck – A variation in between your lightning and normal pitch that doesn’t require a voice-over.
  • Normal Pitch. – 10-minute pitch visuals/slides
  • Long Pitch – 30min-1 hour pitch tuned for Zoom or In-Person with backup slides prepped for any anticipated questions
  • Demo Pitch – A rehearsed and working walk-through of the product that can easily be reset for the next demo

The most important two things for a startup, getting ready to pitch are preparation & passion. If you can connect with your audience in a deep and meaningful way and if you prepare well you’ll be far ahead of most startups.

Categories
business design startups

How much does it cost to build an app?

I’ve been asked this question hundreds of times. I’ve built mobile apps for over a decade with millions of downloads and I’m going to give you the formulas that developers use from the worlds leading mobile agencies to figure out what an app costs.

Whether you’re building an MVP for your startup or you’re building a polished product for a Fortune 500 company, the cost of an app can ranged in price from thousands to millions of dollars and how you design and architect your product can impact that price a lot!

When building an app most app developers will break down the work required into three core parts.

  • The front-end
  • The back-end
  • Design work

The front-end is all the work in developing the mobile app itself. This is what you use on your iPhone or Android device and the Back-end is the work that needs to be done on your server to store files, images and other information for your app to work.

To figure out what it will take to develop your app the requirements or the features of the app are broken down for both front-end, back-end, and design features. Engineers and designers will run estimates for each feature to come up with a high-level estimate.

Each app development firm or team will do this slightly differently but generally they will end up with an estimate of the number of hours, days, or weeks for each feature. More experienced firms will factor in time for handling edge cases, supporting a wide variety of devices and testing across a wide set of scenarios.

Here’s a hypothetical example for a very basic app:

FeatureFront-endBack-endDesignTesting
Login2 days4 days1 day1 day
Display Profile2 days1 day2 days1 day
Take photo1 day2 days0.5 days0.5 days
Total573.5 days2.5 days
Sample app adds up to 18 days of work.

In this basic example we would have 18 days of work. Each development team may do the estimates differently but it’s typical to get an estimate in terms of weeks of total work.

Once you have this estimate you multiply it by the hourly rate that the developer or firm charges This can vary by firm from $20/hour to over $200. This is why some of the ranges for how much an app costs can vary so widely. Even for this simple app that would take just a few weeks to develop you could see prices from $2800 to $28,000.

FeatureNative on-shore mid/senior engineersNative off-shoreHybrid off-shoreJunior
Hourly$180/hour$80/hour$40/hour$20/hour
Total$25,920$11,520$5760$2880
Example Costs

Quality of the app experience

The quality of the app and its success in the marketplace is often driven by the quality of the engineers and the details that are in-place in the design work. Spending more on great design can reduce complexity in engineering and keep your end-users happier in the end.

Technical Choices Impact the Costs

One of the key considerations for app costs is the technical architecture that you choose for your engineering. Most larger-scale mobile apps are built separately for iPhone, Android, and web experiences. This means that these larger firms often have to triple the engineering costs for the front-end of the product. As you can imagine this can triple the costs too. For well-established firms, the trade-off is worth it and well-built apps and web experience provides for both smoother experience for all users and a more robust code-base

Some engineering teams, however choose to use a cross-platform technology such as ReactNative by Facebook or Flutter by Google. These technologies allow you to more easily develop one core code-base and deploy across multiple platforms such as Android and iOS. These technologies are a good option for reducing initial costs but they come with tradeoffs in the user experience and on the maintainability of the code.

Ongoing Costs

Now so far we’ve talked about the initial costs of building an app but most successful apps are thought of as long-term and annualized investments. While many people think of apps as things, successful apps tend to be core and critical to a larger business. Because of this, these apps have to be updated, enhanced, and improved on a month-to-month basis. If your app is tied into a core business you should consider budgeting for an annual expense that’s related to the size of your engineering and design team.

For smaller startups, the initial engineering and design team can be as small as two people but often mobile teams are 5-10 people. Larger corporations will often have dedicated teams ranging in size from a dozen to hundreds of employees.

Because these teams are operational year-round their budgets are also annualized. Larger companies can do this because they think of their mobile teams as a profit center that’s core to their business, rather than a one-time cost.

While the price of an app can range wildly the impact that an app can have on a business is similarly large. Mobile apps can drive significant revenue for larger businesses and as more people are getting comfortable installing and using apps, the mobile-first trend will continue to grow.

Categories
business startups

Slack vs. Teams

The most important tool in a company’s arsenal is communication. Companies that are effective at communication are able to get things done quickly and efficiently. Now that everyone is working remote, having great tools to be productive is more important than ever.

I’m sure you’re busy so this isn’t going to be an in-depth review of every feature but if you’re looking at Slack vs. Teams then I’ll talk through the pros and cons of each product and how you should pick the best product for your company. I’ve used both Slack and Teams for multiple years and while each has strengths each also has weaknesses.

Communication tools reflect the culture of the company and the way the culture and leaders of the company choose to communicate. If your culture is broken, or your company is dysfunctional, tools aren’t likely to fix it. Also if the leadership of an organization doesn’t lean-in, the tools will be less impactful and there are tons of examples of either Slack or Teams being rolled out and not really embraced by the executives of the organization.

If you’re going to take the dive into these tools, really try to get the commitment of all-senior-leadership to try to use these tools in favor of long email chains and countless meetings. This time in history is unique because remote work cultures are really well suited for these types of tools. Organizations that take the plundge now should commit to the tool for at least a few months to really understand the organic benefits.

If you’re new to these tools, it’s important to understand how they may be different from your existing communication tools.

  • Like SMS, it can be a real-time conversation or you can respond to message and questions asynchronously 
  • Unlike SMS, it’s oriented around topics/groups
    (and you can easily leave or silence a topic/group)
  • Unlike Email, group conversations are automatically persisted so new people can get the benefit of past discussions and decisions.
  • Lastly… conversational groups are best when they can be created and disbanded organically by the organization itself. This is bottom up communication, not IT led communication.
Five minute feature overview of Slack and Teams

Pricing

While Slack was a leader in this space, it wasn’t the first chat based collaboration tool. Campfire, IRC and HipChat have been around for years before it. What made Slack successful was their timing and freemium model that appealed to early stage startups.

The freemium model allows anyone to setup a slack for their company for no cost and gets an initial Slack experience that works with all the bells and whistles while keeping a history of up to 10,000 messages. This led to rapid growth of Slack and a lot of adoption from early stage startups.

Microsoft Teams on the other hand is part of the Microsoft Office suite, so while it’s not free, it’s often perceived as free because it’s included as part of the Microsoft 365 Business suite.

The basic paid version of Slack is $6.67/user/month and the paid version of Microsoft Basic Business is $5/user/month.

Recommendations

If your organization is using the Microsoft tools already, including Sharepoint, Outlook and Skype for business meeting infrastructure then Teams is really compelling both from a configuration standpoint and a cost perspective. There’s less external dependancies and you’ll get the majority of the benefits. In general I feel that many of Microsofts tools are good enough. I do hesitate to call them great and the shortcoming is from many layers of software that try to tie together but don’t always… Two example…

  • Teams lets you schedule a meeting but it’s settings are different from how you schedule it in Outlook or how you schedule it in Outlook on the Web. So there’s three ways to schedule a meeting and if you do it wrong, your conference system may not work right.
  • Another area I found confusing was that while Teams was integrated into Microsoft Office it was often confusing where to find key files. Is it in the Team folder, The personal OneDrive, the Sharepoint folder or did someone forget and email it and it’s stuck in Outlook as an attachment?

While there’s certainly room for improvement, I do think that the File Folder + Conversation concept is really smart and this is something that Slack just doesn’t do.

Slack on the other hand is designed to be stand-alone. This means that Slack has been more focused on API’s and integration points to allow third party chat bots to extend the functionality of Slack. While I think it’s ideally suited for small to medium size organizations, companies as large as IBM are using slack with their 350,000 employees. Integrations across GSuite, Dropbox, Microsoft, Box, Zoom, Salesforce and more make it easy to tie many tools together into one conversation.

Remember how I said that communication is a company-culture thing? Well a key reason for that is that these chat tools can makes it easy to give your organization to offer company transparency.

Different teams or departments can have their own channels and make these channels visible across the company. This can make it easy to both find important company information and understand how decisions were made through discussion. This idea of being more public by default is a powerful idea and it allows organizations to move faster.

Conversational interfaces are here to stay because they meet us where we are as people and they foster collaboration in a very intuitive way.