From Idea to Income: A Step-by-Step Guide to Thriving in the Mobile App World

August 02, 2024

Today, I want to talk about mobile applications. This market is not new, and we have achieved considerable success in it. To start, it's worth noting that we are only interested in applications that are not too complex to develop. This way, we avoid the situation where we spend a lot of time and money on development, only to find out after release that there are no organic installs and buying traffic is not profitable. Therefore, we need to approach our research carefully.

An important point: based on our experience, the applications should be for iOS only, due to the higher purchasing power of users, and should have a subscription-based monetization model. The ad-based model brings significantly less money, and to achieve interesting profits, the app needs to attract a lot of traffic. Also, consider Apple's restrictions on app categories that will be extremely difficult to get approved in the App Store. I highly recommend avoiding these categories:

4.3 Spam
Avoid piling on to a category that is already saturated; the App Store has enough fart, burp, flashlight, fortune telling, dating, drinking games, and Kama Sutra apps, etc. already. We will reject these apps unless they provide a unique, high-quality experience. Spamming the store may lead to your removal from the Apple Developer Program.
https://developer.apple.com/app-store/review/guidelines/#design

So, to summarize:

  1. Applications with simple development (up to 1 month)

  2. iOS only

  3. Subscription-based business model

  4. Avoid categories: dating, horoscopes, flashlights, etc.

Starting the Research

First, go to SensorTower and analyze the top 100 applications in each category:

It’s enough to use the free version, select the current date, country (USA, as the largest market), and sequentially research each category.

Analyzing the Results

Applications using AI caught my attention. Why AI? It’s still a big trend, and this category of applications has a wow effect. This is essential for effectively acquiring users through social media ads, where we have just 2-3 seconds of our ad creatives to catch the interest of a user who is lazily scrolling through their Facebook or Instagram feed, not planning to download anything, let alone subscribe to any services.

Next, I go to Adheart, a spy service for working with Facebook, which helps us understand which AI applications are buying traffic.

Seems we got something:
JustSpeak AI

Copy the name of the application and check the revenue data in Sensor Tower:

This application was launched at the end of November 2023, so it’s relatively new but already generating $30k in monthly revenue. We should focus on new applications (up to a year old) because those that have been on the market for a long time have an established audience, usually due to organic installs. New players find it nearly impossible to gain users through ASO alone and must rely on paid traffic. Sensor Tower might not be perfect in its calculations, but in my experience, its data is generally trustworthy.

Let’s explore ads in Facebook Ads Library and find the creatives for this application to understand how they advertise:

So, we have one app idea. Let’s continue the research.

We find a new application in Adheart:

This application reached $100k in monthly revenue.

Their ad creatives:

Another example:
Linky: Chat & Date Your AI Crush
https://app.sensortower.com/overview/6450916631?country=US

Now, do your homework and find a few more options yourself, download these applications, and evaluate the development cost. Also, consider your interest because it’s important to work on something you enjoy!

Verifying Your Idea

If you want to verify your idea, you can use our approach to niche testing. This approach works for any direction, not necessarily related to AI. We tend to avoid categories related to yoga, fitness, meditation, health in general, etc., as these applications are often backed by investors, making it impossible to compete with them financially. Our choice is either trending products found in the top categories of Sensor Tower or niche products, such as fishing spots or RV parks.

Monetization

Since this is a subscription model, the payback period for traffic won’t be immediate. Typically, the market standard is a few months (3-6). That is, you spend money on traffic today, and it returns in 3-6 months, after which profit appears. The timing greatly depends on the type of subscription (weekly, monthly, annual) and the application itself, as different categories show different results, as well as the effectiveness of your ad campaigns on Facebook and other traffic sources.

Onboarding and paywalls play a crucial role. About 90% of payments come from the paywall after onboarding, so it’s important how it looks and what type of subscription you offer. Initially, I highly recommend mimicking your competitors, making only minor changes, and as you gain understanding and experience, start your own tests.

Pros and Cons of Developing Mobile Applications

Pros:

  1. High Market Demand: The mobile app market is continuously growing, providing a lucrative opportunity for new entrants. With the right idea and execution, there is significant potential for profitability.

  2. Recurring Revenue: Subscription-based models create a reliable stream of income. Once users are hooked on your app, they are likely to continue paying regularly, ensuring financial stability.

  3. Higher Purchasing Power on iOS: iOS users tend to have a higher purchasing power, leading to greater revenue potential. Targeting this demographic can be particularly beneficial for subscription and in-app purchase models.

Cons:

  1. High Competition: The mobile app market is highly competitive, with countless apps vying for users' attention. Standing out requires innovative ideas, exceptional execution, and effective marketing strategies.

  2. Upfront Investment: Creating and promoting a mobile app requires a notable initial investment. You'll need to cover development, design, marketing, and ongoing maintenance costs, which can take time to earn back.

  3. Apple’s Stringent Guidelines: Publishing on the App Store involves navigating Apple’s strict guidelines, which can limit flexibility and creativity. Non-compliance can lead to rejection, requiring additional time and resources for adjustments.