Business Model

The app as a business

Many apps – games for example – have a short sales life. Apps which serve an ongoing need, especially in business, have an expanding future as successive versions introduce more features users want and extend the power of the app to help them get things done.

From the developer point of view it's the difference between "sell and forget" and "sell and engage", where the app developer works with all users of the app to support their use and help integrate the app into their business. As business models, both have their pros and cons; sell and forget is for fast, short run profits with minimal start costs while sell and engage is for slower, long run profits with higher start costs. For the record, at Humapps we are interested only in long-term, evolving apps that engage with users.

We are interested in apps that become a business in their own right.

Facebook is an example. Facebook is really an app. The apps is the business, the business is the app: it's hard even to separate them. Similarly Google and even Amazon; these are apps that started out on websites and now appear on a range of devices.

Usually the app as a business model evolves when the app has to be supported by local marketing. Facebook needs local marketing to sell ads, Google to sell Adwords. Lots of apps need local integration and support. Suppose, for example, your app turned a smart phone into a low-cost medic-alert system for elderly or ill people. You'd want the support of the local hospital system and maybe the local health authorities, plus local monitoring and response service providers. In fact, building support around the app would become your major activity and the main factor influencing your success.

In many cases revenue will come mostly not from the initial sale of the app but from customisation to individual users and from support services. What happens with a successful app is that business users develop their processes around the app, so it becomes integral to their business model. Then, as long as the app keeps developing by responding to their needs, you have a business relationship for life.

This emerging business model is so important to the future of serious business apps, we've written a 15 page professional article about it, that you can Download here. It's 996kb PDF.

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