Congratulations to Phillip Ryu and John Casasanta for the runaway success of MacHeist. In just seven days, they sold more than 16,000 of their shareware app bundles with a gross revenue of almost $750,000 (estimate based on published $185,000 donated to charity representing 25% of the revenue). It surely exceeded everyone’s expectations and probably Phillip’s and John’s wildest dreams.
It is frankly astonishing to learn that Mac users are prepared to spend this kind of money on shareware apps if they are presented in an interesting way. It also shows that Mac shareware app developers could make a lot more money if they would band together. After all, this is about $75,000 per app in a single week and I am sure that not very many (if any at all) of the participating developers ever sold as much in a single week. In addition to that it seems that the regular revenue at least for us was not less than usual. So this really is on top. Those $75,000 would be a nice boost to our yearly revenue.
So what do we learn from it?
- Bundles of say 5 to 10 apps priced at slightly more than the most expensive app (a slight adjustment I would make to the current setup) are really appealing to customers and make it much more likely that they actually buy the product, even if they only imagine a marginal usefullness of the other apps in the bundle.
- Getting exposure is much easier for the bundle than for the individual app. If we can avoid building factions and get more developers to support this, the exposure could even be bigger.
- Advertising for such bundles would also be much more cost effective.
There are also a couple of points to give thought about:
- Although I got emails from many people claiming that they never bought “shareware” apps before and a very small number of the 18,000 people had previously been in our database, I think that MacHeist still did mostly reach the same kind of customers that we had before. Apple sells about 1.8 million Macs a quarter, so the 16,000 represent a bit less than 1% of the Mac sales of the Quarter. Or 0.2% of the year.
- 16,000 customers in just 7 days require a lot of handling and not everything on our side went smoothly, mostly because we expected much less. In addition, the increasing spamfileritis creates many problems in actually delivering the licenses to the customers.
So, how to move on?
I think a Mac Shareware Store is called for. A place where customers find interesting bundles, that has an affiliate system to reward developers who drive traffic to the platform, a system where people earn mileage points towards future purchases, accepts all kinds of payments and puts gift-card-like displays into the Apple Retail Stores. Add to that a MacUpdate/Versiontracker/Mac Products Guide like functionality and the talent of a Phillip Ryu and John Casasanta for marketing. Something like the Windows Marketplace.*
The economics of a place like that would have to be a bit different than that of the MacHeist, but instead of a one off pot luck shot it would probably be a solid business with a good revenue stream. To make it fair, the company could sell stock to the developers who list their products. 40%-50% of revenue could go to the developers, 20%-30% into marketing and advertising, 20% into operations and 10% into profit for the owners.
In fact it should be much like iTunes. An app pre-installed on all 1.8 million Macs sold in a quarter, with an editorial content, built-in download system and copy protection. You know, I always wondered what the “Mac OS X Software…” menu entry in the Apple menu is about.
* Before you fire up your flamethrowers: Yes, it does not have Phillip or John working for it; Yes, Vista is a Mac OS X rippoff; I just mention it because it is a basically good idea and has many of the attributes I would like to see in a Mac Market Place. Apple,… do …something!