How We Built An App Business from Zero to $70K/mo [Case Study]

“You’ve got to trust your process.”Marcus Lemonis

After being in the app business for a few years, I’ve learned that it’s important to show step-by-step guides that allow others to have repeatable results.
This market can be competitive… but what market isn’t?
In order to bypass a lot of the mistakes I made (read: lost a TON of money), it’s important that I share my story. It took me and my team YEARS to figure this stuff out.
Hopefully you’ll be able to digest it in a matter of minutes.
NOTE: This stuff still works (in 2017). Join our workshop to see exactly how you can replicate this process by clicking here.

How we Built A Huge App Business

This is a detailed post, so if you want to skip the part that interests you most, click on a link below to fast forward to that section.

Table of Contents

Our Path

The goal of this post is to teach you the frameworks and the model so that you can re-create what others have done. Our duty is to guide and inspire however we can – in this case, it’s with our experience.
In less than 24 months we (myself and my team) were able to publish over 1,500 apps on multiple platforms.
Early on, I sold over 100 of those apps to a hedge fund and collected over $200,000, began networking with the top grossing games on the app store, and slowly rebuilt yet another empire of higher quality apps and powerful portfolios.
The market got more competitive, yet our processes still worked. Profits continued (even now!) to roll in.
There are a lot of ways to make money out there and a bunch of ways to make money with apps… and this is the story of how we did it.
The “process” we used to grow like crazy boils down to a few key principles that anyone could put together in a cohesive way.
Here’s an example of app revenue from our internal document:
revenue from our app portfolio
That aggregates all our apps (paid and free), ad network revenues and other deals for our app companies. This has EXPLODED some months and remained steady during others….but the overall trend is always moving up.
How?
We followed business fundamentals, setup a system, automated processes and used competitive advantages.
Sound crazy? It’s not. In fact, doing this was one of the most straightforward (and fun!) adventures I’ve ever been on.
More importantly, this post is about showing that systems WORK.
Even though this happened over the course of two years, it still works now despite the widespread belief that apps are the land of “one shot wonders” and “gold rushes.”
Below is the 9 point process we’ve used time and time again to leverage a small team into the stratosphere of business…and a guide on how you can do it too.

1. We built apps to make money

This may sound like an obvious statement but you’d be surprised at how many people forget about this business goal once they got lost in the details.
When I started out, I had no plans of being a featured app or winning tech awards – I was in this business to make money.
What’s important to remember is that making money does NOT mean being a scam artist or spammer or even greedy – it means creating value at a level that the market will reward.
It’s about choosing how you focus your efforts and how you measure success.
Our strategy was always about following the basic formula:

Formula for building an app business

Profit = Revenue minus costs


We didn’t talk about downloads as much as we talked about getting source codes at better prices. We didn’t stress about “cool” ideas, but we did stress about finding solid, efficient processes that were profitable.
From Day 1, we always focused on making money…and that made a BIG difference.
[sc name=”Position – 1 – Shortcode” ]
We used the template model to build most of our products and capitalized on our biggest winners as often as we could. This helped us “extend” the life of each project, thus lowering costs and giving more upside.
In the early days, creating market value meant building a lot of apps that converted well with ad networks.
Reskinning Apps

Creating huge portfolios targeted to specific advertisers


Now it’s much more about engagement and delivering a great user experience. Crossy Road’s success was built on a great gaming experience.
crossy endless game

One of the most popular games in the app store today


Then reskinning those winning games and having an IPO 🙂 King is one of the masters of this process.
king candy crush and more

King.com has created multiple apps using the game engine and is now a publicly traded company!


The overarching premise is the same. Some people build businesses to change the world or to raise money for charities (which we did), but our primary focus was less altruistic.
Think less about the money itself and think more about what the market will reward with money. That will change everything.
This is the foundation what we do at Bluecloud.

2. We did massive amounts of research

Research helps you find opportunities.
In business, the most successful companies do tons of research.
Ask any hedge fund manager what the most valuable commodity in the world is and they’ll tell you “information,” every time.
We did two types of research: “internal portfolio” and “external portfolio”
internal and external research of apps
Internal Portfolio research is what most people do when it comes to apps – keywords, trends, titles, themes, characters, etc. It’s the research you do in order to decide how to design an app or find a market.
It also deals with app store trends, answering questions like “what types of apps are popular right now?” and “what’s a popular style in the gaming section?”
This type of research can help immensely with marketing and hitting close to the bullseye.
Now with tools like Apptopia, this can be an incredible way to skyrocket your research (if you haven’t seen their new service, do yourself a favor and check it out here).
External Portfolio research is like business school – how to hire people, how to keep a balanced budget, how other companies stay profitable, how to scale, what models are working. Even though apps can seem like a “trendy” market, it’s a very real and very clear business.
We found that reskinning was evolving to larger and more powerful apps. We started moving to Unity3D and publishing bigger projects.

using unity3d for games

One of our first Unity3D endless runner reskins that made over $10,000


We saw that “micro” markets were starting to take hold and created apps that leveraged the API of Instagram (you know those apps where you buy and sell likes? Guess who….)
getlikes for instagram

I bought this app off someone for $15,000 and made over $100,000 just by understanding the market


We saw the casino category commanding enormous eCPMs…so we built 100 casino games 🙂 To learn which casino game did the best and how you can make your own, read this.
casino apps crush it

One of our Amazon portfolios with enormous eCPMs


By understanding macro level business fundamentals, the entire business grew. Identify winning strategies and operations (macro), then create products that will capitalize on those findings (micro).

3. We went cross platform

When we were first taking off, the idea of using templates and reskinning apps was still unknown to most people. Because of that, everyone just focused on Apple and its App Store.
But when most people zig, the winners zag.
I started helping out with the Kiwi team down in Palo Alto and saw some BIG things happening on Android, specifically Google Play.
So, we moved a few over to Google to see how they would do.

Our test account - things started picking up! We had actually forgotten about this.

Our test account – things started picking up! We had actually forgotten about this for a few months.


We converted virtually all of our apps over to the Android platform, allowing us to “multiply” everything we did by 3 – Apple, Google, Amazon.
We even went as far as to upload a few to the Windows and Samsung stores as tests (but never went much further on the latter two with our own portfolios). 
cross platform apps

Once we understood the power of all platforms, we started migrating all our portfolios


This was a very easy way for us to create a huge army of apps for a small relative cost. Every project we now did not only went on the Apple app store, it went on Google and Amazon’s app stores as well.
The impact? Almost 75% more revenue from Paid apps, In-app purchases and ad networks.
The kicker is that putting an app on Google and Amazon was a fraction of the effort required to get the app JUST on Apple.
Even more exciting is that as technology improved, our ability to do this did as well. Using source codes built in Cocos2d-X and Unity3D cut costs even more, allowing us to dramatically increase output.
Going cross platform was a great way to profitably extend our business.

4. We did direct deals With Premium Advertisers

From my “External Portfolio” research, we learned that the best businesses on the internet all got better deals than the other 90% of the population.
In other words, some apps would be paid $2 if 1,000 viewed an ad, while another app would only be paid $1 for 1,000 views.
Same ad, different website. The only difference? Getting the deal done.
When we learned this, we began pitching every ad network and every big app in the app store to lock down a “direct deal” which is a fancy way to say “premium price.”

direct deal results

A sample of direct deals we have running in Chartboost


We didn’t have a lot of apps when we started doing this but we kept reaching out and showing the larger apps how we could help them out.
As the data came in, we found the apps that performed the best and would email the folks at the big apps and ask them if they’d like more traffic. Of course they would!
They’d send me a new, premium bid that was often 40-50% higher than what they were paying on the open market.
example deal emails

Actual email we would get from ad network looking to do direct deals


Rinse, repeat, scale. Everyone wins.
How to find new opportunities for easy money and brokering deals is one of our primary initiatives at Bluecloud Select. One look at the mastermind discussion and you’ll agree. 

5. We tested over 25 ad networks

mobile ad networks we tested

A sampling of the many ad networks out there for mobile


Over the course of two years, we went through a LOT of ad networks. This was not necessarily about finding the “golden goose” but more about being able to test and optimized effectively.
When we started, it was all about games. But then we realized that it may be worth testing some new ad networks against the gaming networks we were defaulting to.
quickbooks report

One of our Balance Sheets. Yikes!


The results were fascinating.
Some days the game networks won, other days the new networks won. More importantly, we started to realize that sometimes certain source codes and apps will dramatically outperform the expected solution.
I would be remiss to say that one of the downsides of having dozens of networks is that it starts to add up in your Profit & Loss statements (see below). This can make things REALLY complicated. This is only a sliver of the 100+ income streams our companies had.
Consolidation is often preferred for scaling.
The most important takeaway is that you NEED to try and test different things. It’s not necessarily that the ad network itself will be better than another…it’s about finding one that works well for your business.
Over the course of two years, we were able to identify winners in my business and build strong relationships with those networks….but we never would have gotten there without testing others.

6. We capitalized on what was hot

In 2013, we heard that casino apps were on fire. We did our research and confirmed this – they were RAKING in the dough.
So, we built a fleet of casino apps that filled a market demand.
But there were other timely moves that helped with our growth. On the small scale (which many of you have done) is to capitalize on Google Trend style traffic spikes – find huge search volumes that happen quickly that can drive big downloads.
Here’s an example:

App Annie report for our app Running Back Challenge

App Annie report for our app Running Back Challenge


We knew the Vikings were going to the Superbowl. There was no app that came up for Adrian Peterson’s name. So we updated everything (graphics and keywords) right before the Superbowl. NOTE: We took this down just to make sure we’re not stepping on any trademark toes.
The obvious question you’re asking is “Yeah, but what about these days?!”
Well, let’s look at the store:
emoji on top charts

Screenshot of Emoji app going to #1 in April 2015 when iOS 8.3 update came out


The reason this picture is important is because it’s the day after Apple released their iOS 8.3 update….which included a whole new batch of emojis.
So my buddy updated and re-released his emoji app knowing everyone would be searching for it. BAM – #1 in the app store. Zero paid traffic.
What most people forget to realize the TYPES of trends they can capitalize on. Here’s a quick list that we use:

  1. Keyword trends. Pop culture, events, etc. Superbowl. World Cup.
  2. Function trends. Model what people love using. Example: people like “swiping” the way Tinder pioneered. Capitalize on “swiping” for something completely different like Pets or pictures or whatever.
  3. Developer trends. If you know that Apple or Google is releasing some new stuff with the SDK update, build an app that uses it. HINT: There is more to the app game than Apple and Google! You can be the first to use Windows SDK update and…well, you do the math 🙂

Being able to identify these new opportunities is a terrific way to keep your business leapfrogging in revenue (and exactly what the new Apptopia product does).

7. We had a system that was well oiled

Product, people, process. Those are the three parts of business.

operations - building tap to shoot

Screenshots of our team using Slack, Skype and Elance messaging


We organized a team of developers, designers, project managers, virtual assistants, accountants, and everything in between to be able to immediately make things happen.
One great example happened early on the business with Gangnam Style. I sent an email to my developer right before boarding a plane to fly home for Thanksgiving.
We were making arcade games and saw a friend’s app go to #2 in the app store just because it had the name Gangnam in it. We send my developer an email and said “Hey, make an app with that design.”
48 hours later – we uploaded the app. 4 days later we were approved. 7 days later we had just made $22,000 off that one app.
It never would have happened if our processes hadn’t been in place.
Fast forward to 2015, we use the same processes to get almost anything done. “There are a lot of people requesting an ASO course. Let’s build one.”
7 days later, we have the course completed and ready to launch.
ASO course screenshots

Some screen grabs of our new ASO course


Some of the tools we use to coordinate and help facilitate these systems:

The bottom line is that without a process, you’ll never be able to scale. Friction KILLS growth.
Remove it.

8. Networking

There is nothing that will kill your fire faster than trying to do it yourself.
I don’t care how strong you think you are and how much espresso you drink, without the help and information you get from others, you’re toast.
This was something I’ve always pushed myself to do and urged my team to do as well – reach out to other people in the app community and ask them what’s going on.
We would share our secrets and our #1 ad traffic solutions. We made it a point to constantly reach out to people and ask them what else is out there while giving as much as we could.
talking to app developers and marketers
A great side effect of this is that you start to hear about all the latest trends as well.
The people who communicate the most almost ALWAYS have the latest information and the best vantage point.
And, as much as you might be an introvert who wants to just read blogs, the real information doesn’t come until you get on the phone or meet in person.
Over the course of two years it was critical that we stayed in touch with all the other developers, the ad networks and the other people in this space.
If you’re interested being a part of our mastermind community (where we share these secrets), click here to join.

9. We Got It Done

This one isn’t rocket science and is often the #1 reason why people don’t get where they want to be.
Early on I realized I was very susceptible to the most evil fallacy in business:
Putting a lot of ENERGY into something but not putting a lot of EFFORT into it.
Meaning I could spend hours and hours researching and coming up with strategies and mapping it all out and getting the right source code.
But until I actually launched the thing, I never really knew what would happen.
tasks in asana
It’s really easy to be a theorist in business, especially in a marketing business. If you look around any marketing website, you’ll see tons of people who can rattle off every Facebook and Twitter strategy known to man….but they only have 2,000 followers.
They put tons of ENERGY into learning how to do everything, but not as much EFFORT implementing it all.
Same is true with apps. You can buy all the source codes and do all the keyword research, but if you’re not launching your apps, you’ll never know.
This is not to say I am perfect. Quite the opposite – I struggle every day with the natural inclination to consume information vs produce new business opportunities. But that’s what business is – who steps up to the plate and who doesn’t.
The more you swing the bat, the better your chance of hitting a home run.

What’s Next?

The biggest success we had was learning to build systems. A lot of people look at what we did and say “Of course you did well, you were there early on in the app craze” or “Well you have a website so it’s easy for you to network with people.”
And realistically, some of that is true. The early success did come from a bit of timing.
But remember – I could only produce all those apps at the beginning because I had a solid system built with a development team. And this website doesn’t just run on it’s own.
Without systems in place, neither would have ever gone anywhere.
Moving forward we’ll be focusing on what we’re most drawn to – education, awesome content and connecting people who want to make things happen. And yes, working on some new exciting apps (in our portfolios and in other peoples’).
For you, the opportunity is endless. While I can’t promise there will be another reskin gold rush next week, I can promise you that by having a great network where you can connect with people like yourself, you’ll achieve something much bigger than you can on your own.
Start small and learn how to build an app. Then take it from there.
You’ll be ready when the “next big thing” comes….and it will, sooner than you think. Your app dev empire depends on being prepared.
We built Bluecloud Select to connect the people in our community who are dedicated to building something awesome with their lives. It could be a small app thats a hobby, or the portfolio that’s going to get you out of your full time job to spend time with your family.
Join us on our next two year journey. We’ll share everything we do with our members.
 
Rock and roll,
Carter

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