There are lots of little “iPhone App Developer” companies popping up. You call them with your idea, they design and build the app for you. The person with the idea thinks and wants this app to be wildly successful. There are only two scenarios:
1) The App is successful. In this case, the development company gets screwed. They make what the quoted for the job, probably a small fraction of what the app earns for the owner.
2) The App is a flop. In this case, the owner is obviously screwed. They paid a bunch of money for, essentially, nothing.
I think we all know: ideas aren’t worth crap. It’s all about follow-through, and with these relationships, the follow-through is nearly all in the hands of the developer. The idea-guy might be in charge of “promotion” or some such, but in world of iPhone apps, promotion doesn’t mean much. It’s all about quality apps, which promote themselves.
Ok, maybe there is a third. 3) The app is successful commensurate to the price paid to build it. My guess? Super rare.
What’s my point? It’s that I think these “iPhone App Development Companies” are actually seeking out people with bad ideas and deep pockets and probably aren’t very good developers. If they were good developers, they would develop a great app themselves and earn all the profit. Instead, they just go “Ah that sounds too hard, let’s find some idiot with $10,000 and build a crappy app for him.”
Hey how about this? The developer earns X% of the profits. So if the app is successful they’ll be successful right along with it. Maybe. But only if there was also a base price and that base price was fair to the developer even if the app didn’t sell a single copy. And if it could be done with absolute legal binding to the official “owner” of the app to pay the developer.
Some of this relates directly to web design and development too, but not all of it. Websites often have goals less tangible than “sell a lot of copies.” where that is usually the goal with apps (if it’s not, these scenarios are kind of moot). Websites might sell products. With iPhone apps, the app is the product.
I liked this article, these companies that build apps for people that have the idea, but otherwise aren’t capable seem like a great idea on paper. The sad part is though, as you pointed out, is that really they are taking advantage of these people. Not only does an app need to be well built and serve a specific purpose that is attracting, but it needs to catch on and chances are it needs to be fast or else it will fall into the flop category. The iPhone has created a modern day gold rush of sorts and until apple changes the ecosystem of the app store most people’s apps wont gain any traction and they will fail.
I totally agree, and I think the greater concept here applies to way more scenarios than just the simple iPhone App Devs — make sure everyone involved in your business, from idea to completion to sale, has clear and aligned motives.
How is this relationship any different than any other client/designer, client/developer relationship? If a client wants a logo for their new business, the designer charges and gets the same amount whether the business succeeds or fails. It’s the client’s job to study a potential designer/developer portfolio and it is their risk if the business fails. Why would it be different for App clients?
Any different than a design firm putting together a web site/app for a terrible business idea?
@Mike – I think it’s different because if I have a super great idea for a logo, I could create it, but I wouldn’t make any money. The success or failure of the business using the logo has many other factors.
With an app, the only important factor is the app itself, the quality of which lies exclusively with the development team.
@Tim – I think it CAN be different. Let’s say the business idea is selling old coats. I can have this idea and build the website myself, but I don’t have any old coats to sell. The website sits on top of the business, and the product is something else (e.g. the coats). Whereas with the app, the app typically IS the product.
Well, it is no different of business that are doing websites,
Most of them create websites for companies and do not launch web applications themselves,
I get your point, but there is certainly a viable market for people that want iphone app for promotion purpose or an intern application
Of course this platform is not open, and if the iphone become less popular, well your pretty much screwed up as a iphone app developer
@Chris valid points. So you’re it as is the same concept as if the development for something like Plurk was outsourced to a firm (to unnecessarily restate something )?
I dunno, I think the firm has their place as an external entity unless they do the app for free or invest in the business in some way (other than the time they were paid for).
If firms are actively seeking shitty apps then, yea, that’s pretty immoral. I’m sure the market will eventually weed that out. Esp. when the Nexus One starts ripping huge market share away from Apple (prediction, it’s a hot phone)
I don’t know – I guess you’d have to go back and define what “quality” entails in an app. Is it a combination of the UI, number of bugs, usefulness, etc or does it at some point depend on the marketing, price and trends associated with that type of app? If I develop a great app, built on on a great idea but it ends up with terrible promotion, is overpriced or in a pool of too many competitors, I can’t imagine that I’d have ripped anyone off because of my development – if the deliverable is quality.
Above it seems you are talking about iPhone apps that only make money from the actual sale of the app?
Not ones that complement a business, e.g. dominos order pizza from your iPhone etc.
In scenario one as well developing a successful app is highly preferable to developing a flop as it means you can get more work to your agency at a higher price.
Cool aussie iPhone app dev company http://mogeneration.com/
Does Apple have any sort of set up on their end to allow people to split profits equally? Or does one party have to be responsible for making a direct deposit into the other’s bank account? I for one wouldn’t want to have to follow up with the company for years afterward making sure I’m getting my share.
While I would agree with the end result of your logic (insofar as the app developers are concerned), I would hate to think I agree with your reasoning.
Every good thing, every common thing, and even all of the bad ‘things’ are initially ideas. Be it good or bad, the idea is the fundamental building block, not the code that makes it work. It very much does take good execution to back the idea up, but without ideas, we’d still be banging skulls with rocks.
Even the notion of a ‘web’ was only an idea at one point, and one could argue we haven’t technically executed it as well as we could have (or will) yet.
@Don – Great points. Ideas really are the lifeblood of advancement. Although is the idea itself “worth” anything? Hard to say. I still kind think all the “worth” is in doing something with it.
I think the root of your problem is the fact that the middle man receives more profit than the originator of the product. Compensation for investments often hinges on risk.
The variable rates of compensation boil down to the old parable would you rather have a bird in the hand or two in the bush? The developer has no risk, and a fixed profit. Whereas the middle man or idea man is risking losing whatever they paid the developer for a potentially unlimited profit. As was pointed out this situation is actually better for the developers since most apps are doomed to fail.
It is funny that the first post mentioned the gold rush. Lots of people went out looking for the motherlode, but the storekeepers selling picks and shovels were the ones who consistently got rich.
Sorry when I was rereading my post “your problem sounded much more aggressive than I intended. What I wanted to say was “What I think you are objecting to…”
Great read, and I totally agree. Home builders only want to build great houses so their reputation will grow and they can build more. Although I wonder if any of these dev companies ever see a great opportunity and offer some kind of deal…I know I would.
Months back I was considering using a dev company to create an app (I’ve since decided to pursue the project independently) and was surprised to hear that they NEVER take interest in the back end. Seems kind of like a waste of talent to me…only building apps for other people and their ideas…but maybe that’s just the “contractor’s mentality” at work. I guess it’s easy to argue both ways. Still, there must be some ideas where the developer stops and says whoaaa I want in on this one!