The Hidden Art of Scaling Your App Business

“If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us.” – Jim Rohn

Growing Your App Business
When you first start your app business, your entire focus is set on going from zero to 1. You buy source codes, you read blog posts, you do everything you can.
Eventually you get there. It’s not always pretty, but you get there.
What happens next is that you start looking around and saying, “OK, so now how do I go from 1 to 10? Or 10 to 100?” You’ve got the processes, the knowledge, and most importantly, the education that got something going. But how do you really grow your business?
This is something I’ve learned a lot about in the last few years. It’s also the #1 topic I consult developers about – they simply don’t know how to grow.
It’s perfectly normal to “hit the ceiling” or feel like you’re “spinning your wheels.” But it doesn’t have to be like that.
In a nutshell, I want to show you a step by step process that you can follow that will help you scale your app business. If you follow this plan, you will be in the best possible position to grow.
This has worked very well for me, and while I can’t promise everything will be exactly the same, I give it to you in full confidence.

Step 1: Identify + Deconstruct

Identify and Deconstruct
The absolute most important part of scaling is to know what you’re working with. If you don’t do this, you might as well throw money and time out the window.
The reason deconstructing your business is so important is because it allows you to measure and “silo” everything. It also forces you to identify procedures that were currently only in your head and not on paper.
What this means is that you’ll be able to effectively assign tasks to the right people.
In the app business, here is a basic list of the tasks you’ll need to be doing:

  • Developing or coding the app/source code
  • Designing various assets
  • Researching ASO
  • Creating iTunes entries
  • Publishing the app (uploading, etc)
  • Marketing
  • Analyzing results
  • Researching new themes
  • Updates
  • Everything else
  • (Checkout our Mobile App Development Guide for a breakdown of the above)

And that’s just the big stuff! Sometimes we as entrepreneurs forget how much we’re processing in our heads and don’t realize how much information we’re actually trying to control.
Giving Up Control
That’s the key word here: CONTROL.
As you’ll see, the premise of this process is to slowly break apart your processes, hand over that control, and manage efficiently. Keep that in mind.
Here’s how you achieve Step 1 of scaling:

  1. Take two hours this week and write down everything you can imagine about the app process. The best way to do this is to think about one app as an example and walk through everything that would need to be done in order for that app to go live.
  2. DO NOT leave out details. Write down exactly what the designer would do, who they would deliver it to, who would provide feedback, how feedback is determined, etc (just one example). Don’t worry if this is paragraphs long, just write it down.
  3. Once you have the whole process written out, go back and assign names to each part of your process. Who does what? It’s OK if you’re doing virtually everything…that just means you have a lot of room to grow 🙂
  4. At the end of this, identify places where you have no one working on it (ASO and keyword research is a good example). Mark those as “Need training or hiring”
  5. Assign a price to each part of the task based on hourly rate. For example: uploading an app would be 2 hours of work for a developer charging $15/hr. Uploading the app costs you $30.

By now, you’ll have a big chart that has EVERY SINGLE PART of your “app process” written out, assigned, and priced. Pretty cool, right?
What this will do is allow you to become objective about what’s going on and see the holes in your work flow and your business model. It will also get you ready for Step 2 of scaling.

Step 2: Train, Hire, or Suck It Up

Training EmployeesThis is probably the most important lesson I can give you about scaling: scale is not possible in every situation. You can’t learn to run before you learn to walk. I’ll explain and prove why that’s true in a minute, but realize that all businesses need to mature before they can really scale.
Once you have your business mapped out and priced accordingly, you need to make some decisions. You’re going to start making one of three decisions:

  1. Hire an inexpensive worker who you will train to do something specific. Example would be hiring a virtual assistant and training them to do your market research (assuming they have no previous knowledge).
  2. Hire a trained worker that requires little to no training but will cost you more money.
  3. Do it yourself.

You can imagine the pros and cons of each – mostly a cost/benefit situation. That means that you need to determine if the COST is worth the BENEFIT to your company.
PRO TIP: If you’re making less money but want to start the scaling process, do more yourself and hire inexpensive labor. Your time is worth less so it’s hard to justify hiring expensive people. If you’re making more money, it’s better to hire better people because your time is worth more. 
Now, here’s the piece that most people do not realize and that stops them from really growing:
They outsource everything, but don’t replace their new time with more profitable work.
You might be successful in outsourcing ALL the parts of your business which frees up 30 hours a week for you. While you might think that’s totally awesome, you’re actually NOT growing – you’re just getting more time.
If the value of your time does not go up, you are not creating any new money. You’re simply working less (which is also awesome!). But this isn’t about how to work less, it’s about how to grow like crazy. THEN you can work less 🙂
Here’s a step by step example on how to do this:

  1. You realize that you’re spending all your time researching keywords, giving feedback to developers/designers, uploading apps, and trying to find new themes. This takes you 40 hours a week to do and you’re making $200/week.
  2. You decide to hire two virtual assistants and train them on everything you’ve been doing
  3. After about a month, they get the hang of it and require only 10 hours of management a week. You now have 30 free hours.
  4. BUT, you also have a new cost (two virtual assistants at $5/hr x 15 hours a week = $250/week). You’re losing $50 NOW, but you’ll eventually produce more apps and that profit will go positive.
  5. More importantly, you now have 30 hours to go out and start making a lot more money than $5/hr. You can consult other apps, you can try to get sponsorships, you can build an ASO course. Literally anything you want that will make you more $$ than $5/hr.
  6. You start doing something that makes you $20/hr. Boom – your business is now making $600 more each week.

Increasing Your ValueThen you repeat this process. Hire more people, build more apps, hire someone to do what you’re doing so that you can start doing work worth $50/hr.
Do you see how this works? You are simply replacing what YOU are doing with someone, training them, then doing something more awesome (and lucrative).
The biggest resistance I get from people on this is the idea that “no one else can do what they do” or that “it’s impossible to train someone to do it right.” I can promise you, with 100% confidence, that this isn’t true. Trust me – I’ve gone through that too.
By performing Step #1, you will realize how much actually can be done by someone else as long as you realize that it may involve a good amount of time/effort to find and train someone. It’s not an overnight process, but it’s very important.
That’s when you get to Step 3.
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Step 3: Calculated Goals and Home Run Hitting

Here’s the last piece of scaling and the most fun. It can also be the most stressful – the more you have, the more you can lose. But if you’re reading this I’m pretty sure you’re not into losing so that’s not an option.
Once you get through Steps 1 and 2, you’re going to realize that you have a great little business on your hands that is growing nicely. It consistently puts out revenue each month and maybe even grows 10-20%. That’s awesome!
Here at Bluecloud, I’m always pushing my own limits. Maybe one month I make $275,000, but I still wonder why I couldn’t make $500,000? Answer: there is no reason. That’s where Step 3 comes in.
SuccessStep 3 is all about playing two sides of business: Managing a tight system that is consistent and low risk, always growing and producing cash WHILE you’re going after high risk, high reward opportunities. This is critical for anyone out there that wants to go big.
Everyone I know in the business (myself included) have specific moments and events they can point to that “hockey sticked” the company. 95% of the time, it was the result of rolling the dice on something.
Step 3 is all about creating those hockey sticks in your business. Just so everyone knows, a “hockey stick” in business is referring to a graph that has a sudden, sharp increase which looks like a hockey stick.
Once you’re through Step 2, you’re going to want to start splitting time between the consistent, good business and other endeavors. These can be:

  • Investments (think venture capital or other)
  • Building a big app that could go way up the charts
  • Creating a new company
  • Becoming an advisor in a startup in exchange for equity
  • And anything else that could have huge returns

If you think these are hard to find, they’re not. You’re just not spending a lot of time looking for them because you’re thinking about your current business. These are “long shots” that don’t usually play out well. But, sometimes they do. If you have enough of them going, one home run is all you need to retire.
Here’s how this would work:

  1. You’ve established your processes and business to be highly systematized.
  2. You’re working on more profitable work and bringing in more money for the business.
  3. As you’re managing everything, you allocate a chunk of money to build out a monster casino app which you start working on 5 hours a week.
  4. A month later, you put some money into a startup that you think is awesome.
  5. You continue to re-invest your profits into things that COULD have huge returns.
  6. Down the road, one of those investments (app, startup, stock, whatever) goes bonkers and you make a ton of money.
  7. Repeat

OutlierNow, let me be VERY clear: I cannot guarantee that this kind of stuff will work for everyone, obviously. I can tell you that this is how almost all my friends and peers have made lots of money, but I can’t tell you what to do or invest in. All I can do is show you the process and tell you HOW it works.
Once you complete Step 1, 2, and 3, you will start to realize how the app business really is just like most others. There’s a reason why people can scale business in any category – they follow logic just like this.
It’s powerful, stressful, exciting, and 100% worth it. If you’re looking for a way to multiply your money, you should really start thinking about creating these types of systems that grow geometrically. If you’re looking for more free time, you can just do Step 1, maybe a little of Step 2, and come meet me at the beach for a double mai tai. It’s up to you.
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Don’t Forget To Scale

Chad (Mureta) once gave me a great piece of advice – he said “Dude if passive income is the goal, you might as well focus everything on making passive income from the start.” It kind of blew my mind, especially since I know how awesome he is at that.
The takeaway for me was that if I want to scale my business over the next 5 years, I should be focusing on scaling all the time. I should always be thinking about scaling and doing something each day to get closer, even if it feels like I need to put our fires RIGHT NOW.
That’s what I want to leave you with – the ability to identify your goals and build your business around them. I’m talking about personal goals – mental, emotional, physical, spiritual.
Want more free time for your family? Build your business that will get you more free time. Want to own a private jet? Build your business to scale.
It all starts with what you want.
 
 

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