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The Wrist Business

I’ve been thinking quite a bit lately about the business side of Apple Watch development. After recording this week’s Release Notes episode, I wanted to further clarify my thinking on why I don’t think Apple Watch Kit Apps are a good place for me to be spending my time.

Let me state up front that I’m not telling anyone else how to run a business. You do whatever you think is best for you. I just hope clarifying my thoughts will help contribute to the overall conversation. Food for thought.

We know we won’t be able to sell watch apps at the time of the Apple Watch launch. So the value to our bottom line for making a watch app has to come indirectly. I’ve seen a few arguments now that this indirect revenue might be significant, and I want to address them one by one.

Some things I’m taking into consideration when looking at the following arguments:

  • First, that it will take me or a small team a minimum of a few months, if not a quarter, working on a watch extension to get it right.[1]
  • Second, any time spent on a watch component is time that could be spent on other improvements to existing apps, other new apps for iPad/iPhone, marketing efforts, etc. In other words, things that could be making me more money.
  • Third, I’m talking about right now. Does it make sense to build a Watch app today, given what we know and what we have at our disposal? All of this could change in a few months, years, etc. What I want to know is what I should be doing right now to benefit my bottom line.

You’ll gain customers you wouldn’t have otherwise had

I think the best case scenario for this argument is an app where the watch and phone are complementing each other very strongly. Apps where having the phone component alone didn’t solve the problem nearly as well as when you add the watch. I’m certain these ideas are out there, but I’d argue there are fewer of them than people realize.

Take Fin, for instance. An obvious watch component to Fin would be to allow the user to start and stop the timer with the watch. But is that enough to convince someone who hasn’t already bought it? Is that so compelling compared to just tapping the phone or iPad screen to start and stop? Wouldn’t that time be better spent making a remote function that would allow the user to start and stop the timer with another iPhone or iPad? After all, there are far more iPads and iPhones out there than there will be Apple Watches, and that won’t change for a few years at least. [2]

One of the first things Charles Perry told me when we both watched the keynote together was that Apple hadn’t presented anything that was better than what he already had on his phone. I had to reluctantly agree. Again, I do think there will be some apps for which adding the watch component will increase value significantly. I suspect the vast majority of Apple Watch apps, however, will be a small convenience improvement, at best. That’s great, and it doesn’t make me want Apple Watch any less as a customer. But does it drive new sales of my apps? I’m not sure.

You’ll make your current customers happy

Although your current customers have already paid you, and thus won’t give you any more revenue, the goodwill you will get from giving away this new watch functionality for free will net you money later through referrals to friends, etc. Or something to that effect.

David Smith presented this argument well on his Developing Perspective Podcast. I don’t completely disagree, but I also don’t see how focusing on a watch extension is a better investment than focusing on another improvement to one of my existing apps.

No doubt, getting watch functionality for free is nice for those who have already bought your app and who will be buying an Apple Watch as well. Do you know how many people that is? Is there any concrete way of measuring how many of your existing users will buy Apple Watches?[3]

If you have an email list of your current customers, you could poll them to see how many would be interested in watch functionality. Old fashioned. A bit messy. But doable.

You may find that although Apple ends up selling millions of watches next year, none of those buyers have bought or ever plan to buy your app.

Meanwhile, what about all the users of your app who don’t want Apple Watch and won’t buy one? Couldn’t you ultimately make more of your customers happy by adding a function to the existing iPhone or iPad app? After all, you know for sure how many people that would benefit.

The notion that a significant portion of your current user base will care whether or not you make a watch component is a massive assumption, backed up by no clear evidence. I like to trust my gut, but I trust it more when I have data that concurs.

You can charge more for an app that has watch functionality

If this were true, you could also charge more every time you add a major new feature to your app. But almost no one does that, and I suspect almost no one will for the watch, either.

I’d argue many of us could charge more for our apps in general. And I do charge more. Because I target customers who are willing to pay more. If you’re chasing a customer base that thinks 99 cents is expensive, however, you’re not going to have any luck raising your prices when you add watch functions. [4]

Apple has set up the WatchKit SDK specifically to restrict developers to free or at best freemium models. They are training customers to expect all software on the watch to be free. If you want to fight them, it’s going to be a long uphill battle.

I make my money on services, not the app itself, so getting on as many screens as possible is a benefit

No argument with this one. If you charge customers a subscription of some kind for cloud services, and the UI makes sense on a watch, maybe you should already be working on a watch app. I don’t make any of my money that way, but I’m thinking about heading in that direction very strongly.

Still, if your service is young, and your iPhone and iPad apps aren’t quite as good as they could be, the watch functionality might be something to put into the “nice to have” category instead. Depends greatly on where your current apps are, and how useful that cloud service is on the wrist.

Being there on day one will give you a great shot at getting featured by Apple

I think indie devs should stop chasing this dream altogether. For one, the majority of features these days are going to large companies who have direct PR connections to the iTunes staff. Or to indies who have a track record of getting featured, and thus the iTunes people are watching everything they do. If you’re a nobody to Apple, you’re most likely to remain so, no matter how successful you are financially.

You can catch Apple’s attention by doing something awesome. It does happen. But just building a watch app isn’t awesome enough. There will be thousands of watch apps on day one. And relying on the minute possibility that Apple will feature you is approaching your marketing from a position of powerlessness. You are letting Apple control your fate where you should be taking that fate into your own hands.

Also, getting featured isn’t what it used to be. It’s a sales bump, but you’re not going to retire on it.

Great innovations come out of experimentation, and you never know what the little thing you play with today might become

Absolutely. There is always a time and place for new ideas, for tinkering. But then there are the products that pay your bills. As long as you balance your time between those two things appropriately, you’ll be fine. If you drop everything in pursuit of the thing you want to play with instead of the thing that will help you succeed in business, you’re, as my co-host suggested this week on the podcast, a hobbyist, not an entrepreneur. That’s fine. The world needs hobbyists. And everyone needs a hobby. Just don’t expect to live on your hobby.

If the argument is that spending a few hours every Saturday tinkering with an Apple Watch app while spending the rest of the week working on other aspects of your business is a fine strategy, I agree. You may be better off researching marketing, or learning Swift in that time, but if it’s between tinkering with the watch or watching a crappy reality TV show, by all means do the watch.

Being first to market will give you a leg up over your competition

I refer you to this video from Dave Wiskus on the benefits of being first in technology. I also would suggest looking at the Twitter streams of many indie devs who struggled to get Today widgets into their apps on day one of the iOS 8 release, only to suffer from difficult debugging tools, changing APIs, Apple’s fickleness with approvals, rejections, rejections after previous approvals, and let’s not forget, the bug in Apple’s code signing that rendered Today widgets inoperable on day one. If you like living on that razor edge, be my guest. Just be aware you’re entering a world of pain, Smokey.

Even if you gain an advantage over competitors because you have a watch component and they don’t, how long does that last? How long before your competitors all make watch components, too, thus eliminating your advantage? Maybe you get some new loyal users out of it, but it’s short-lived, at best. Sounds like a small upside to me.

If you don’t do it all of your competitors will, and you’ll lose sales

This may be true. And it may be a good reason to work on the watch. But don’t kid yourself into thinking adding a watch component is going to make you more money in that case. “Do it or else” is avoiding something bad happening, not making something good happen. You won’t be getting more sales, you’ll just be losing fewer sales. You’ll be dumping months of work into maintaining your status quo, not building your future growth.

Ultimately, you may have to do that to remain relevant. That’s fine, as long as you see it as defense, not offense. Everyone has to play defense sometimes. But defense rarely puts points on the board.

In conclusion

I’m as excited about Apple Watch as any reasonable person can be. I look forward to owning one and to using all the great software likely to be made for it. I just don’t think the watch is going to become a significant portion of my revenue anytime soon, based on what I know today. So I’m choosing to focus the bulk of my attention elsewhere.

Again, I’m not telling you not to make watch apps yourself. You may have better reasons than I do to pursue this.

I’m also not saying I won’t be making my own watch apps—eventually.

Of all of these arguments, making money on services rather than selling apps is the most compelling to me. I think that’s the area where I’m most likely to focus my thoughts in the near future. I have little experience in that world, but I think researching that would do me better than building a watch app for any of my existing products. After all, a subscription-based service has potential to benefit my entire business, far beyond the wrist.

  1. Maybe I’m overestimating that, but from experience, I know developers tend to underestimate far more often than overestimate how long it takes to ship anything. If you’re pretty quick historically, go ahead and shorten that by a few weeks. If you’re David Smith, cut it down to 48 hours. But don’t lie to yourself about how big an investment of time it will be.  ↩
  2. And let’s not forget: getting people to not look at their watches to see the time while performing is one of the central reasons Fin exists in the first place.  ↩
  3. It would be great if someone came up with a way to do this in code. If I could drop something into my iPhone/iPad apps that detected the presence of a connected watch, then I could at least get a sense of how many of my customers would benefit. Not today, of course, because there are zero Apple Watch owners today. But at least for future reference. Is this even technically possible? Someone get on that. Seriously. Make it your OpenSource good deed of the week, if it’s doable.  ↩
  4. It’s tempting to think that people who buy an expensive luxury watch from Apple won’t be cheapskates about buying software. But you know better than that, don’t you?  ↩