Every story that starts with “How I bootstrapped…”, is a happy story. Nobody ever bootstrapped a product to profitability and felt bad about it.
This is different.
This is the long story of how I built and grew AppyGEN’s revenue to 6k+/month. And why I started hating it while still working full time on it, and how you can avoid going through the same thing.
AppyGEN is a native Android app builder, designed for internet marketers, or more specifically: non-developers looking to make money online.
It was launched in 2014, and since that time, I’ve done my best to keep it under the radar and basically never talk about it to anyone who was not a potential customer.
How it all started
I’ve always loved building stuff. I made my first $1000 at 14, selling remote administration tools to wannabe hackers.
So in 2012, while pursuing my college degree (in France) and struggling to pay my rent, I started taking remote freelance dev jobs whenever I could. I was making a substantial amount of money for a broke 22 year old, doing what I loved. I even started investing some of it in online poker, heck, I even built a bot to play for me (didn’t work out though).
After saving enough to pay my debts and some more to sustain my lifestyle, I decided that I could do this for a long time. So I dropped out, and went back to my home country (Morocco) where the cost of living was about 5 times cheaper than France.
Fast forward to a few months later, I had amassed enough money to live comfortably for the next two years. But with all my friends working on their 9 to 5 jobs all day, I got bored pretty fast.
So, I decided to start a company (with a friend) and bring the startup mindset to traditional small businesses. I remember thinking: I’ll be the first to do this so I’ll definitely have an edge in the long run. (Spoiler alert: Didn’t work).
We had the bright idea to sell a customer & appointment management software to doctors who were still using pen and paper at the time (Nope, not even excel). We sold a few copies, but it quickly became obvious that most of them didn’t need our tool, there was no market for our product.
After that, we tried making a cool b2c app startup. We had no experience in mobile dev but it was fun learning everything from scratch. A few months later, we had 10.000+ users on our app, but not enough revenue. Ad revenue was too low to keep us afloat and eventually, we ran out of money to pay the office rent.
With no money and no vision for the future, we were back to square one.
The inception of AppyGEN
One night, in an effort to sharpen his Android dev skills, my partner built a simple app with a list of videos, targeting a specific trending niche.
In a matter of days, we were up to thousands of downloads from all around the world. The RPM (Revenue per 1000 impressions) was high, and almost overnight we started making a good amount of money just from the ads in that single app. So we thought, let’s make more of those apps!
There was no need for us to spend months building an original startupy app, we could just make similarly simple apps and make a ton of money!
And it worked, a month later we had enough money to pay our rent for the rest of the year. I loved automating stuff, especially if it could make me money and save me time at the same time.
So we turned our apps into templates and I made a tool where we could just input the app name, icon and content, click a button, and get a native & profitable app, ready to be published. We used the tool to make dozens of those apps until we ran out of niches to target. Since we had enough money coming in, there was no real motivation to keep doing this.
As an experiment, we’ve decided to turn our tool into a product and sell it to people looking to make money online, and I knew just the place: The Warrior Forum.
We wrote a PDF to teach the process of finding niches to target, monetizing and publishing the apps on the play store. And started selling v1 for a whopping $49 lifetime payment, including updates.
Here’s an old video of one of the early versions:
Embarrassing right? Not to the members of the warrior forum.
They were so used to overpriced bullshit courses that they couldn’t believe this simple, cheap software was helping them make a consistent and recurring revenue in a matter of days!
They loved it and sales skyrocketed.
We’ve updated the tool a few more times and raised the price to $97 per license. I loved reading the reviews and getting emails from our customers saying we’ve changed their lives. I wanted to do this forever, and quickly stopped pursuing the original vision of the company.
On the other hand, my partner who didn’t get to work on AppyGEN or enjoy it as much as I did started losing interest. So I bought his shares, and he went off to do his own thing.
Where’s my recurring revenue ?
A few months later after me and my partner parted ways, sales started dwindling and I had to take another freelance gig to make some extra money.
One day, I was having a conversation with one of AppyGEN’s customers and he shared with me his ad revenue on Skype. This guy had made hundreds of apps in less than two months, and was making 10 times what I was making from the software sales!
I was blown away, and to be honest, I also felt entitled to some of it. And that’s when it dawned on me. Why was I giving away lifetime licenses to a tool that helps you make money every month ?
The answer was simple: I had no real experience in entrepreneurship, pricing, marketing or growth. All I knew how to do was build stuff.
So I dropped my freelance gig, and embarked on a 6 month journey to learn everything about startups & entrepreneurship, as well as sharpen my web development and sysadmin skills. By the end of the learning phase I had a solid plan:
- To turn the software into a SaaS.
- To have a free plan where users could make and monetize apps in exchange for a cut from their ad revenue.
- To have a paid plan for users who want to keep 100% of their ad inventory.
It wasn’t easy. I had to figure out a way to compile native Android apps on the cloud (emphasis on native), and handle the ton of traffic pouring in from the apps, in real time.
I also had to keep my promise to the hundreds of early adopters who purchased the lifetime plan when the software didn’t have any server costs, and basically just give them premium features and 100% of their revenue for life (including the thousands apps guy).
I stopped selling the desktop software and spent another six months building the web platform. It was an extremely fulfilling experience.
SaaS is hard, making money from free users is even harder
The web platform was ready mid 2015, I silently launched a beta to the existing (lifetime) customers and they helped me eliminate the bugs I had missed. At that point, I thought it was a done deal. All I had to do was drive some traffic.
Since users could sign up for free, I wouldn’t even have to invest time in converting them to paid users or optimizing the funnel. I’d be sharing their ad revenue and making money wether they upgrade to a paid account or not.
But still, I wasn’t very confident about my ability to manage tons of API calls from every app made through the software. So I decided to soft launch to a small audience of 200 people who had signed up to the waiting list.
This part was only supposed to take a few weeks. Just enough time for the new users to build and publish some apps and make sure that the platform does not break down under heavy load. It ended up taking months before I could get those users to publish any apps at all. There were so many things I didn’t account for, more specifically:
- Cumbersome Onboarding: Getting someone who had no development or app experience from “I want to make money online” to “I just published my first app on the play store” to “I just made my first dollar” was extremely hard to do.
I had to figure out a way to teach users how to:
- Research for profitable niches find or create copyright-free content for their apps
- Create a developer account on Google Play Store (And convincing them to pay the $25 fee before they made a cent)
- Publish apps and do app store optimization.
Also, free users lack motivation. I never had that issue with the early adopters, most likely because they paid a price to use the tool. No matter how small that price was, they weren’t going to just drop everything whenever they stumble along the way.
The new users, not so much. At the slightest whim, like “Create an icon for your app”, or “Pay the $25 google play developer fee”, they’d just close everything and disappear.
So I was back at square one again.
After spending almost a year working my ass off, I still had no recurring revenue, new server costs, and a shitload of subtle obstacles I didn’t account for and had no idea how to deal with.
Self-doubt and not changing the world like everyone else
AppyGEN was taking a toll on my personal life. I had previously disabled all my social networks to focus on it, and more than a year had gone by with nothing to show for it.
Reading the successes of other simpler products made me angry at myself, why did I have to go after such a complicated project ? Couldn’t I have just made a to-do list app ?
I also came to the conclusion that AppyGEN didn’t really help make the world a better place like every other startup I read about. It seemed to me like it was just making the play store a worse place, helping non-developers publish hundreds of unoriginal apps that only took away from the visibility and chances of more ambitious apps.
I was myself an app developer once and I could clearly see how my product ultimately harmed other developers. I started hating everything AppyGEN stands for, no matter how much money it continued to make for my existing customers.
But what else could I do ? I had already invested so much of my time into it, and I knew for a fact that it could eventually become a profitable business, plus I needed the money.
I had learned so much in the process of building the platform, and for that I was grateful. There was still a lot to learn too, and I was confident it would serve me well in my future ventures. So I decided to secretly keep working on it.
Whenever someone would ask me what I’m working on, I’d say I’m freelancing. Whenever I’d get a freelancing offer, I’d turn it down saying I had too much on my plate right now. Gone were the days where I would proudly say that I’m building an awesome SaaS.
Onboarding and motivating free users
I did my best to optimize the onboarding process as much as I could. Which was not enough considering the fact that users still had to do some work in order to be able to generate unique apps.
I didn’t want every app made through the software to look the same, and I knew there was no way they would be able to make an income just copying existing or demo apps. They had to invest some time in reading the tutorials, doing research, creating icons and assets, etc.
So I tried a bunch of things like drip campaigns, a concierge service for paid users, a forum, and a bunch of other hacks I had read about in case studies.
Although these things did help decrease churn a little bit, it wasn’t enough. Only about 5% of new users would get to the point where they got value from the software to invest more of their time in building apps and growing their revenue (and mine).
You’d think that if you promised someone they’d make a consistent, growing and recurring income, without requiring any upfront investment, they’d be all over it day and night. It wasn’t an onboarding or engagement problem, it was a motivation problem. And it took me some time to figure this out since none of the churned users would answer my emails when I reached out.
Completely burned out and disenchanted, I decided I’d try one last thing before giving up: Gamification.
The idea was to turn the whole thing into a game, where you learn a bunch of stuff about making profitable apps, build your app portfolio, and grow your ad revenue. All at the same time, while having fun and competing with other members.
It felt like the perfect (and only) answer to all my problems, so I scrapped about 50% of the existing code and re-wrote it in a way that made gamification an essential and required part of the process.
New users would automatically be assigned a “rank” and two or three “missions” they needed to complete in order to move to the next level, every mission had a step by step tutorial on how to complete it and every time a user gets to a higher level, they’d get rewarded with a new rank and a shiny badge icon.
Users could see their progress in real time and compete for the top 10 spots on the leaderboard, automatically.
It worked great and everyone loved it!
Here's a screenshot of the new gamified dashboard:
Dividing the onboarding process in terms of “levels” also helped me figure out (thanks to mixpanel’s analytics) that anyone who got to level 3 in the first week, would most likely keep coming back, making more apps, and eventually making his first dollar.
It was one of those amazing Aha moments that got me into entrepreneurship in the first place.
Before I knew it, the conversion rate from new user to active user (level 3+) skyrocketed from 5% to 45%. I could finally start driving traffic to the site and working on other things like acquisition and retention.
Growing slowly, quietly and automatically
By the end of 2016, we had 1000+ active users and monthly revenue had reached a consistent $3k+/Month for the past 6 months. 70% of it from sharing the ad revenue of free users, and 30% from paid subscriptions.
I couldn’t understand why users who were making a thousand dollars in ad revenue each month, didn’t upgrade their accounts, after all it only costs $25. Turns out, a lot of these users were living in countries where they couldn’t have a Visa card or PayPal account, and just couldn’t pay me even if they wanted to.
In terms of revenue, this worked out fine for me, I’d probably be making a lot less money without the rev-share plan and I wouldn’t have been able to offer the service for free.
Remember earlier when I said I hated what AppyGEN stands for ?
The recurring revenue didn’t fix that, I still felt too self conscious about the whole thing, and I would constantly think about it whenever I was working on it.
It’s hard growing a business you hate, no matter how much money it made or could make. But I couldn’t just ignore it and be contented with the current revenue, hoping it will never drop. It happened once. One of my biggest earners had lost his play store account due to policy violations and overnight the revenue dropped to 2K until the same guy decided to get back at it. So I had to keep a continuous flow of new users at all times.
I sucked at SEO and paid advertising. Press, social and content marketing were out of the question since it would put me and the software in front of all kinds of readers, and I wasn’t ready for that.
In retrospect, a bunch of my worries were exclusively in my head, but that’s what you get when you spend years keeping your work to yourself, convinced that what you’re doing is bad.
Although I still enjoyed adding new features, I still felt bad about sharing it with the world, and acquisition is all about sharing nowadays.
So I came up with the idea to get my users to share it, so that I didn’t have to. To do so, I set up a very enticing referral program:
Users could share their referral link and get a 10% cut of the ad revenue from every app the referred user makes, forever.
For example, if user A brings in user B, and user B makes an app that brings in $10/day, user A would get $1 every day without lifting a finger.
If user B decides to upgrade to a premium account, user A would get a commission every time user B pays his subscription.
And it worked, some users even stopped making apps and focused solely on referring new users.
A few months later, AppyGEN’s revenue doubled to reach $6k+/Month.
Today, I am actually grateful that AppyGEN is bringing in enough money for me to work on whatever I want. But more importantly, I am so grateful about the hard lessons I learned along the way.
Hopefully, you were able to extract some of those lessons through this post. If not, here are the most important rules you should keep in mind for your next project:
- Making money should never be your main motivation when working on something new.
- Never, ever, keep your work to yourself. Share as much as you can, as soon as you can.
- Build something you’d be proud of 5 years from now.
If you have questions or want to get in touch or want to work with me on something, I’d love to chat. Email me (eothmane.io[at]gmail.com), follow me on Twitter (@get_eo) & Medium (Othmane E.), or leave a comment below.
Thank you for reading!