Summary of My Apps Make $4.5M/Year With $0 Marketing
Summary of Key Financial Strategies, Market Analyses, and Business Trends from the Video "My Apps Make $4.5M/Year With $0 Marketing"
Main Financial Strategies and Business Model:
- Ericos’s Shopify app business generates $4.5 million annually with almost zero marketing spend.
- The business maintains a very high profitability margin of about 90% by staying lean on expenses.
- Revenue is primarily subscription-based with tiered pricing models that increase with usage.
- New apps are initially launched for free to reduce friction and encourage installs, then monetized once organic growth is established.
- Existing users are grandfathered into free plans when monetization begins, minimizing churn.
- Free trials and a no-questions-asked refund policy reduce risk for customers and help maintain positive reviews.
Market Analysis and Opportunity:
- Shopify’s app ecosystem is mature with significant competition, but there is still room for smaller, agile developers to compete with VC-backed companies by focusing on superior user experience and faster feature releases.
- Ericos identified a niche in creating user-friendly apps that are simpler than most indie developers’ technical apps and more nimble than large corporate offerings.
- The Shopify app marketplace has a built-in customer base, reducing the need for traditional marketing and advertising.
- Validation of app ideas is done through direct engagement with target users in communities (Discord, Facebook groups), gauging interest via feedback and pre-launch demand.
- The next promising marketplace suggested is monday.com, which is actively expanding and supporting developers with good APIs and a growing enterprise customer base.
Methodology / Step-by-Step Guide to Building and Growing Shopify Apps:
- Idea Selection Criteria:
- Easy to build within a couple of months.
- Broad market appeal to all Shopify stores.
- Low competition niche.
- Validation Process:
- Engage with target users in relevant online communities.
- Share app designs or concepts to gather feedback and measure interest.
- Collect emails or pre-orders to confirm willingness to pay.
- Product Development:
- Analyze competitors’ apps for strengths and weaknesses.
- Design an app with a better user experience.
- Find a technical co-founder by pitching your combined skills and market access.
- User Acquisition and Marketing:
- Initially offer the app for free to friends, clients, and community members to gain installs.
- Leverage organic growth and app store rankings to drive further installs.
- Use customer feedback to improve the product continuously.
- Customer Support and Reviews:
- Provide 24/7, highly technical customer support to solve issues promptly.
- Actively request five-star reviews within the product and via monthly emails showcasing the app’s value.
- Gamify the review process internally by incentivizing support agents with bonuses and leaderboards based on review conversion rates.
- Monetization:
- Introduce subscription pricing after initial traction.
- Implement tiered pricing based on usage.
- Always offer free trials and refunds to reduce risk.
- Tools and Tech Stack:
- Communication: Slack
- Customer Support: Intercom
- Feature Voting: Features.vote
- Task Management: Linear
- Shopify-specific management and analytics: Mantle
Lifestyle and Operational Insights:
- Ericos values flexibility, working without strict schedules, focusing on quick wins early in the day, and prioritizing passion-driven work.
- Early-stage teams can be very small: a designer and a developer can handle product and customer support initially.
- Engaging with communities is crucial for learning, networking, and finding co-founders.
Business Trends Highlighted:
- Building on established marketplaces/platforms (like Shopify, monday.com) offers a ready customer base and less need for upfront marketing.
- There is a growing emphasis on user experience and rapid iteration to compete against slower, larger players.
- Gamification and incentives within teams can improve customer engagement metrics such as reviews.
- Lean operations and focusing on profitability from day one are key to sustainable growth.
Presenters / Sources:
Notable Quotes
— 00:02 — « My Shopify app Kaching Bundles is currently making me $4.5 million a year and we spend almost zero dollars on marketing. »
— 09:26 — « Finding a co-founder is pretty much similar to doing sales because you have to sell someone an idea that you can make a successful business and you just need their help. »
— 11:21 — « It's crucial for us to get those five-star reviews so we optimized all of our processes towards it. Within our product you straight away just ask for reviews, then we have monthly emails showing how much revenue this app brought to you and in that email we also ask for review. »
— 13:39 — « I always launch new apps for free because it reduces friction of installs. As soon as I start getting organic installs I grandfather all of the users that are already using our app so that they wouldn't need to pay and I monetize only the new users. »
— 16:19 — « At start two people are enough: you just have a designer who does all of the product stuff, you have a tech guy and you're good to go because you will be doing all of the customer support yourself to know what your clients are struggling with. »
Category
Business and Finance