11 things I didn’t know about app development

Wednesday’s DiscoveryBeat 2009 conference, an afternoon event about app development monetization put on by VentureBeat, was like all our events: High on how-to wonkery, low on self-promotion pitches, and as one person put it, “no douchebags.”

Yet each of the speakers who gave a prepared presentation to the audience of mostly developers dropped some surprising factoid that I typed into my BlackBerry. I checked with attendees, “did you know this?” Eleven of my bullet points proved to be new info to app developers as well.

1. The majority of app developers don’t pay for market research before they design and build their apps. Yet this kind of research is inexpensive and vastly improves the likeliness of creating hits rather than misses.
2. Apple App Store downloads are growing 20 times faster than iTunes music/video downloads. Even paid apps outrun iTunes growth by a factor of seven.
3. Social network apps, compared to other types, have shown a relatively low frequency of usage and a low retention rate after 90 days. Games are where it’s at.
4. Super-analyst Mary Meeker at Morgan Stanley says that despite the buzz over anything mobile, the current market is under-measured, and future growth underestimated.
5. You need $0.00 to promote an app company now. For example, Sibblingz will distribute your game to Facebook, the iPhone, and the Web without charging you anything upfront. They’ll take a cut of revenue as it comes in.
6. Reach and revenue are nice to have, but retention — getting users to keep launching your app — is the key to success.
7. 90% of social game leader Zynga’s revenue comes from virtual goods sold within games and on social networks, not from advertising.
8. It costs $3 to acquire an Apple app customer through advertising. That’s more than the customer will spend buying the game. (Notably, no one in the audience disputed this stat.)
9. Most app discovery comes from viral word of mouth among customers, not from people searching app stores for something to download.
10. That said, mass marketing still works. RockYou spends hundreds of thousands of dollars a month “buying users” with ads. Zynga spent possibly millions marketing its hit Farmville on Facebook and elsewhere. (Zynga GM Bill Mooney was in the room and didn’t dispute this.)
11. Big brands like Mountain Dew are often presumed by tech industry workers to damage the credibility of anything they touch. In reality, they can be as powerful as app stores and game networks for popularizing an app. It never hurts to talk to them.

[Photo (cc) Kenneth Yeung – www.thelettertwo.com]