August Blue Cloud 1

Hello, hello, hello everybody and welcome to BlueCloudSelect. Very exciting stuff. I'm just going to zoom out right there and welcome to August. Wow! We're almost past, we are past the year mark and thank you so much everyone. We have a ton of questions this month. We're breaking into a few different videos and I want to just dive into it so make sure you go through and make sure you watch all these because there's going to be a lot of really good information. We do a lot of advanced stuff in here. I'm going to do a couple of deep dives that I think will be a lot of fun. Let's just get started!

Question #1: I am an ideas person. I am not interested in launching an app company with loads of apps. I have an idea that I have tested by talking to people I trust, but are nay sayers. They say this is one of the most exciting app ideas they have encountered. It is multileveled and will require a great team. Some people say I need to code. Others say I need to understand some of the coding language and do a wire frame, which I am doing. Do I need to learn to code? I really am not interested in this, but I have the vision with specifics written out and feel I could communicate this to a team of coders. I have many more questions, but this is the first. Thank you. [1:10]

Answer #1:

·       Great question because I get this all the time. I have a lot of people that email me, call me, message me everything. They say I have this awesome idea. I would love to make this happen. What do I do? I don't know the first thing about coding. There's a few different things to think about.

·       First of all, do not learn to code. If you are an idea visionary type don't learn to code, don't waste your time learning how to code. Nobody will win if you learn how to code because it's just not. So don't do that. Okay?

·       Now something to think about, an idea, how much is an idea worth? If you do not have an infrastructure and that means you don't have a team of people that can help make this idea happen, you don't have a developer, you don't have a marketer, you don't have a customer support team, you don't have a leader. There's no infrastructure. An idea is worth about 5%. That's how important an idea is to something being successful.

·       Now if you do have an infrastructure, if you have a full team of people, you have a proven model, if everything works and you just need ideas to put in there to like turn into winning models, that is like 80% of the pie, which a lot of people don't realize. A lot of people forget that when you do have everything you need, the idea is the hardest part. Especially when you get to the high levels. The reason I say this, this is exactly how Google is set up. The biggest problem Google says they have is they do not have enough good ideas, which is kind of mind boggling to think about, but if you talk to anyone who works at Google, a lot of my friends do, they will tell you that pretty much every department has, you'll get 50-100 engineers handed to you. You'll have a $200 million budget. You will have absolutely no reason why anything can't happen, but if your idea is not good enough, like it doesn't matter what you have. So keep that in mind. If you don't have anything else except the idea, it's not worth anything. Most engineer marketing types are going to tell you the same thing. They're going to be like it's all about the execution, blah, blah, blah. That's not always true, but the realization is you need to have the entire infrastructure at your fingertips for the idea to be worth a lot. You're kind of coming in from the without infrastructure side so keep that in mind.

·       What I would also say and I'm not doing this to try to knock you down or anything. I don't know what your idea is. A lot of times people in your position won't tell me your ideas so I can't really give you a lot of advice. If it's so good and if there are a lot of nay sayers, the best thing you can do is start asking people to give you money because that is the number one thing that will tell you how good your idea really is. If it's so unbelievable, which is maybe like one in two million, that people will just write you a check based purely on an idea or an opportunity or whatever, that's one thing, but if people are like no I'm not going to give you anything and they ask you for a plan and who is your team and what's your exit strategy and how are you going to market it, blah, blah, blah, blah, blah. Then you might have an actual business model. Then you're getting into a start up pitch world, but an idea on its own is not going to do anything. You need to have like a real plan behind it before it's going to do anything and that's the idea of the infrastructure. Like you build out everything that makes an idea more valuable. So keep that in mind as you do it, but to answer your question directly, do not learn to code.

Question #2: What is a non-game, non-entertainment mobile app direction you would or are going right now? Ideally can leverage the same things as with games/entertainment apps, an optimizable and repeatable platform that lends itself to a large presence in a category, lots of apps with same base platform. I like business to business, but that adds the variable of selling to business instead of directly to consumers in app stores. If no non-game/entertainment direction right now for you, what things, two or three, would you do to evaluate? [4:58]

Answer #2:

·       I think what this question is asking me is what are the big things out there right now, what's the next big category? Games/entertainment, that's that, but what else is going on and what's a platform that can be essentially re-skinned. That's kind of what this is all about. Now they like b2b and that variable selling to businesses is called a ton of money. So if you're not interested in that, that's totally fine, but business to business re-skinning is probably the most lucrative thing you can be doing because 95% of people will not go and sell to businesses because they don't like to do that. They won't figure out how to do it and they just won't do it and that's why business to business is so unbelievably lucrative because you only need ten clients and you're a millionaire. So if money is not your goal and you just want to go to consumers, that's going to really kind of limit you in terms of building a platform. There's not a whole lot you can scale that appeals to a mass audience so what I'm going to talk about is kind of the in between, not necessarily business to business, but more like the individual level. Kind of like what a website template would be.

·       I think fitness platforms are going to be huge. I already see a couple of these coming up that are going to be really amazing where you can put in all your own content and all of a sudden you now have your own fitness app. So you can do that for gyms in a business to business example, but on the kind of consumer level you can re-skin that for individual fitness people or whatever it may be and then push that out to all those types of people.

·       Finance, same deal. There's a million different ways you can make a finance platform that can be easily sold to other people.

·       Same with health. I think health can go a lot of different ways. A lot of it depends on what sector in the health industry you want to go into, but that whole business.

·       Honestly anything that works for the internet marketing world is going to work like in this new kind of platform business model for apps. The best place to do that is to go to ClickBank.com which is an affiliate marketplace and just go to the marketplace up in the upper right hand corner and you can see all the categories that people sell affiliate products.

·       Those are the most lucrative markets you can be in. It's the same stuff that's on affiliate marketing is the same lucrative markets in the app store. There's not a whole lot of difference. I don't see that changing.

·       In terms of business consumer re-skinning stuff other than entertainment and games, which you may be wondering, the short answer is you're going to have a really hard time finding something like that. It just doesn't really make sense anymore because it kind of comes down to content, so if you don't go to content producers, it's hard to re-skin it so you can see how the same thing happens on the internet where you can't just create the same website over and over and over to someone else. It's better to sell the frame work and then let people put the content in it. Otherwise you're going to try to own a hundred websites and manage it all and you can't really do all that. So unfortunately the business to consumer kind of mass market model just get's, it's becoming what do you call, non-involved anymore, whatever that word is. It's like extinct I guess. So those are some of the hottest markets. They're all kind of becoming big. It's just basically all the marketplaces that have a ton of money are starting to get into apps and usually ones that can turn into platforms.

Question #3: I am pretty good at selecting English keywords for my apps. So my apps are getting good download numbers in English speaking countries. English speaking countries (USA, UK, Australia, Canada) has nearly 53% of downloads from my entire portfolio of 20 apps, but when I tried translating the keywords via odesk, the download in non-English countries are not satisfactory. What is your suggestion? Should I hire specific keyword researcher for each country? If so, how will I know whether they are good keyword researchers in their local language? What would you do if you were in my shoes? [8:57]

Answer #3:

·       Well I did a lot of localization with a bunch of my apps and we still do a fair amount of localization with some apps I work on in different countries.

·       What I can definitely tell you is just pic the top two or three languages. Do not try to get into every app store you can because honestly it's just not worth your time or money. Like there are so many other things you can do that are going to get you way more downloads than trying to figure out how to localize for these individual countries.

·        So pick the top two or three and once you find those top two or three, which may be Japanese or Chinese or whatever, Spanish, I tend to find people from that country so I will go on Facebook, I will go on LinkedIn, I'll go on Twitter and I will hit up as many people as I possibly can who are speaking the native language of that country. I did this for Spanish a couple of times. I've done this with a couple of people I know who are fluent in Russian when I had a couple of apps that were killing it in Russia. I've done it with Chinese because I had some Chinese developers for awhile. Lots of different ways to do that, but I just found people that I didn't have to hire, people that I knew and then I would have them write it and then I would buy them like a book or a six pack of beer or something. It doesn't really matter and I knew that they would come up with like all the good words. It can make a pretty big difference. It's harder to gauge.

·        A lot of it comes down to having the screen shots localized as well, understanding what images to put in the screen shots. That makes a huge difference. I know in China for King of Coins for example we changed the prizes that we were showing to prizes that were really prevalent in China and Hong Kong I didn't even know about. The localization made a huge difference as opposed to when it was just the language.

·       So most importantly just focus on the top two. If I was in your shoes, I would find people who are native speakers so they can put in a couple kind of catchy phrases that other people might not understand.

Question 4: Apple is pulling some crap again. Several of our games on updates have become nonexistent in terms of search for our Spanish title and Spanish keywords, which are in English and if you go to the Spain iTunes store, our apps will not even show if you put the actual title into search. No keywords work either. Contacted Apple and their explanation was that the "Apple confidential algorithm" is working correctly, but that title 'may' have been too generic for it to pick up. Never explained why the keywords don't work though. Now several other high end dev that we know that have had high ranking solid games in the app store for a few years have been completely removed in the US store in regard to search. Their games are still showing in ITC as if nothing happened, but the games are not searchable by title nor by keywords. These guys are in constant contact with Apple over this, but getting nowhere.  Daily long keyword stuffed nonsensical titles are getting through Apple. Games that are not re-skins with titles that are 40-60 characters long are being approved, but are not searchable. Updates for existing games that are solid, well performing games are being masked by Apple so as not to be found. What are your thoughts and what do you think any of us should/could do to get Apple to see clearly? [12:10]

Answer #4:

·       First and foremost, I totally empathize with you and I know how frustrating this is, especially when your entire business kind of lives and dies by this algorithm and I totally hear you and I think it's an evolving company and I've met a few people that work on this algorithm and they're figuring it out too and it's not an excuse for them. It's just like this whole thing is kind of a crap shoot, but what I will also say is just kind of a reality check is like this is their business, this is their sandbox.

·       If they want to do this or they don't want to do this, you can get as pissed as you want, but like there's nothing, this is their business model and the reason why I say that is not to take their side, but realize I'm assuming if you wrote this you have been in the business long enough where if you're using Spanish keywords to try to capitalize on keywords for English terms, I bet you've also capitalized on the algorithm not working and you got a lot of downloads that you probably shouldn't have gotten. You got a lot of people that didn't even want your app. You just crushed everybody else in keywords that didn't make any sense and I didn't hear anybody complaining then. Like "I shouldn't be getting these downloads. My keywords suck" or "I'm just doing hacks".

·       Apple should definitely get their algorithm better and so when they do try to figure it out and they might not get it perfect, you just got to realize that it comes and goes and that's part of playing in somebody else's business model. They own it. That's it and that's one of the problems with just relying on organic traffic and I think one of the best analogies is imagine if all websites just relied on Google. If everything was built on the SEO game, like if there were no such thing as Facebook traffic, if there was no way to buy anything, YouTube or AdWords or Pinterest, like there was no such thing as paid traffic, if everything was just SEO, it would be a nightmare and that's how we all seem to think that if Apple isn't playing the way we want, then it's their fault. When in reality it's our responsibility to go control way more downloads and way more traffic and not be like I'm completely beholden to their algorithm. So the only reason I'm saying this is to try to expand the way you think. You've got to open up your marketing and download context. You can't say Apple is doing everything wrong and this is such bullshit when in reality like, they're doing it. They might not be doing a good job at it, but that's their business and instead of saying "alright, this is my wake-up call to say how am I going to get more traffic from other sources? Why am I only focusing on this source? Why is ASO my only game? Why am I not figuring out how to drive massive social media traffic or figure out how to buy Facebook traffic or partner with big distribution partners? Why is Apple still running my life for downloads?"

·       That's what I'm going to say about that because there's really nothing we can do. That's just the name of the game.

Question #5: Does the initial approval process for your first app being submitted to Apple take the longest? If so, how long does it take on average? Thanks. [15:37]

Answer #5:

·       In general, I haven't had a whole lot of experience because I only first published an app like 15 times, but it typically takes about normal. I would just go to appreviewtimes.com. That's a good aggregate of everything, but realistically it shouldn't take much longer than normal.

Question #6: My intention is to use my Diabetes application as a lead generator for my business. This is not created yet, but I will model it after myfitnesspal and another diabetes site. I want to drive massive amounts of traffic so I can get people into my sales funnel where I will market to them our information products, diabetes product website, nutritional coaching, live wellness events, etc. I would love to make money with the front end on the application itself, but even if I can come close to break even, my intention would be to make money off of them on the back end by marketing to them regularly. With a marketing budget of about $1,000-$2,000 per month, how many people, assuming it's a good app, do you think I can get signed up per day? Even a range would be helpful so I can run some projections. [16:42]

Answer #6:

·       First of all this is a great idea. That kind of the mobile back end, you're not building the blog post you wrote a long time ago. This is the same idea where you use your app as a way to get leads. Kingdom of Slots is the same idea. You do that, people log in with Facebook or with their email ID and then you create a database and then you email market to them. A lot of people actually in BlueCloudSelect do this. They've been successful. I know a bunch of my business partners have been really successful so I think this is really great.

·       Now when it comes to doing projections or anything like this, I can take a stab in the dark, but honestly, this all comes down to how many downloads are you going to get for your app and what is your conversion rate. Here's some basic numbers I just kind of pulled out, my best guess.

·       Let's say you're getting 50 downloads a day from organic traffic. You get good targeted keywords on the diabetes field, which incidentally I think that's a perfect example of a long tail keyword that you could totally knock out of the park. This is a great example of a niche app that has a lot of potential, a very specific problem that people need to be solved. So let's say you get 50 downloads a day from organic traffic. That's going to be 1,500 downloads a month and let's say you take $1,000 and you manage to get it down to $1 cost per install on whatever ad traffic you're doing. Let's say Facebook, so that's an additional 1,000 installs and you get 2,500 installs a month. You get 2,500 people and let's say 5% of people who install the app and use it sign up for an account. I don't know if you're like you've got to create an account to use the app. That number might go up to 30% or if this is a "hey put in your email here to get newsletters, tips, everything you just mentioned". It all depends on how much you force people to use the app, but you can do the math and just take these numbers and change out whatever you want for your forecast and you'll get a pretty good idea. Five percent tends to be a pretty standard number if you just have a pop up like "put in your email address and get some alerts" type thing and 30% if you put in the "hey do you want to create an account" or "no I don't want to. I just want to use it" and then up to 60% if you say "we're going to give you a huge bonus" or "we're going to give you all these free health tips if you do it".

·       What I would do in this situation is the same thing people do in internet marketing. I mean we do this on BlueCloud where you give away an eBook or you give away a course or training. For you it might be give away a free guide to living with diabetes. Who is your specific person and if they put their email address in, you'll email them the book. That's a great way to boost your conversion rates.

Question #7: Love the group! Couple of questions. What are your thoughts on crowd funding for an app? Do you have any experience with that? Any tips or ideas? Second question, you sold your company to Apptopia I believe. I'm assuming that because it was a portfolio of skins the sale was based on revenues. How did you find the buyer? Did you go through a broker? [19:55]

Answer #7:

·       So there's two parts to this first. Crowd funding. I don't have a ton of experience with crowd funding with apps. I've seen a lot of apps get crowd funded or seen a lot of kick starter indigogo stuff. One of my very, very good friends just raised $1.1 million for her products on kick starter, which is pretty incredible. First solo female to ever do that and break seven figures. She's taught me a lot about kick starting and how to do that so hopefully I can provide some insight.

·       For crowd funding, to raise a lot of money, especially for an app, it needs to be a specific problem for a specific audience. Like you are building an app for maybe you're building it for a fundraiser. Your brother's got a condition that you really want to raise money for or you want the app to raise money for that. On the flip side, it's got to be a very specific audience of gamers who want this really cool game to come out and you've got, this is what the product is going to be. What it cannot be is like "hey I think this is such a cool idea and I really want to make this happen. I just want to make money. If we all do this, the world's going to be a better place". That does not work. Always remember that people always crowd fund because it's going to benefit them. The idea might be altruistic, but at the end of the day people are doing it because they want what you're producing. It's not as altruistic as you think it is.

·       The second thing in crowd funding especially for apps is team is critical. So when you're crowd funding to raise money for an app specifically, you need to have an amazing team on your what do you call it? The roster. You've got to be like this person worked at Zinga. This person worked at Glue Gains. This person worked at whatever. That is like really, really important to be able to justify raising a substantial amount of money. If you go into this like "I don't really know much about coding. I want to figure this out", you're just going to have a much harder time like actually raising the money.

·       The third thing is you want to be able to give away really awesome bonuses and I don't know enough about app related bonuses to give you like exact examples, but I would definitely recommend going to kick starter and seeing what people give away for what levels. So if you donate $100 we'll send you a free t-shirt or whatever it may be, but that makes a massive difference in the amount that you will raise.

·       The second question, Apptopia was actually the broker. I sold it to an independent guy who worked at a hedge fund and he was trying to start his own mobile app. I guess it was like a hedge fund. I wouldn't call it a hedge fund. I guess they call it a holding company where essentially you acquire cash producing assets and then you hire like a manager who is going to hedge them in terms of making it better and better. So Apptopia just brokered the deal. They got us on the phone, they put us together, they made the deal happen, they explained the terms, the whole deal.

·       It was not just based on revenue. It was based on, revenue was a big part of it, cash flow, but it was also based on how good were the apps, the intellectual property, the IP. What were the apps? Were they like complete shit? Were they good? Where was the traffic coming from? How legit was it? It was based on the history. My apps were, I sold it kind of like at the top of the bubble. So I was going $5,000 a month, $10,000 a month, $20,000 a month, $30,000 a month and I made like $75,000 a month and then right as soon as I hit $75,000 I turned around and said I want to sell this and so they looked at that and a lot of people think why did you want to sell it for $200,000? You're making $75,000 a month and the reason why is it was one app that drove a lot of that and none of us had any idea if that was going to keep going at that rate and there was a lot of risk involved with the deal. This person was willing to cash me out very quickly and make the deal happen in exchange for that risk. So if I had been making $75,000 a month for eight months straight with no down turn and I had a proven strategy, I probably would have gotten a million bucks for that portfolio. Very different business model.

·       Finally the deal structure. If I had been like "I want all cash" or "I want a different earn out" or "I want to be an equity stakeholder" or whatever, that price would have changed considerably. Typically cash offers are lower, earn outs are higher, but you know, it takes longer to get your money. It's lower risk for the buyer. Things like that.

·       How did I find the buyer? I just contacted a bunch of brokers and I told them what I had. I knew, I said "here's my assets. Here's how much money it's making". I spent a couple days organizing everything and I just sent them like a one sheeter and said "here's what I've got. Who do you know?" Apptopia can help you with that. App Business Brokers can help you with that. Flippa can help you with that. Honestly, just reaching out to random people in business who buy and sell companies could be very, very effective. That's how it worked out.

Question #8: How do you perform effective market research for apps? Can you provide a step by step example and tools which one could use to do so? [25:35]

Answer #8:

·       This is a really important question because I'm getting a lot of questions. A lot of people asking about market research because this is like the next, this is going to be the next kind of ASO market research beyond just ASO and key words. I want to point out a very, very important kind of big picture contextual thing that I think it's really easy to forget about.

·       What that means is there is a fundamental difference in market research between ASO research and market research, like greater market research. There's one group of people that already are in the app store. They use apps, they know what apps can do. They use their iPhone for apps and they think about apps in terms of I'm going to use apps to solve my problems. So if they already have a phone and they're like "I'm a clarinet player. I wish I had a metronome. Oh I know that there's probably an app for that" so they're going to go into the app store and they're going to search. When people like that, people who are in the app store and they are searching for very specific things, that's what ASO tools are all about. It's going to show you which keywords have approximate volumes. Apptopia will show you who your competitors, how well they're doing. Things like that, but that world, the ASO world and the app world itself, focuses on people who are already educated enough to know that apps can do all this stuff and we may think that that is a really, really big amount of people in the world, when in fact it's actually very, very small.

·       When you look at the bigger picture, you take a step back and you get a 10,000 foot view, you find that there's a lot of people out there who want something, but they don't think about apps in terms of solving that problem or finding what they want. They don't go to the app store to find it. They go to Google. They go and they search on the web or they go and call their friend or family member and they say "do you know where I can get this" or "do you know the solution for this" or "where can I find out how to relieve my back pain". Someone might say "here's an article on a website you should go read" instead of saying "here's an app you should download to get rid of your back pain". Whatever it may be. People just don't go to the app store yet, but there's still massive amounts of these market supply and demand things going on.

·       When you look at that, when you see the bigger trends which will eventually get into the app store, we're not there yet. We're still ahead of the curve in that sense, that's when you want to use things like Google Keyword planner, programs like SEM rush, which is a competitive intelligence tool and honestly just going to SEO tools and seeing how web traffic works and finding how the internet marketing world does market research. It's a massive discipline to do this on the internet, but SEO tools will give you huge insights into how can I find keywords and very unique and specific niches and how do I know how powerful they are.

·       Instead of going into all the detail like you asked me, which will take two hours. I would definitely say, just go and find some of the best market research tools on the web. Google Keyword planner is a great place to start, but just type in market research, internet marketing and you will find the best tools like buzz sumo and all that out there.

I'll see you guys quickly in the next video.