App Cubby didn’t have an app in the App Store on day 1, so there’s not much to reminisce about today — the 5th anniversary of the App Store launch — except the frustration of having a finished app ready for the App Store, but no developer account with which to publish the app. At the time Apple was inundated with requests for developer accounts, and even though I had requested one within hours of Apple announcing the iPhone Software Development Kit, my account wasn’t approved until early August 2008. I’ll be celebrating App Cubby’s 5th anniversary in the App Store next month with a big announcement, but in the mean time I stumbled upon an interesting document today.
I founded App Cubby in April of 2008 on a $20k loan from family members. Below is the investment proposal I presented them, dated March 21st, 2008. Though some of it is a bit cringeworthy, I decided to publish the whole thing unedited. I’m proud to have recognized the potential of the App Store and Apple’s “touch platform”. And I’m incredibly proud of what I’ve managed to build in the ensuing 5 years. Big changes are coming for App Cubby, so it’s nice to reminisce a bit before announcing the beginning of the next phase of the company.
Investment Proposal — March 21, 2008
Overview:
When computers were first built, they took up entire rooms and only performed simple calculations. Users had to load each program individually and type very specific commands to perform those simple calculations. In the 1980s Apple ignited the personal computer revolution with the Macintosh, and pioneered the use of a mouse and a graphical user interface. Since then, faster and smaller computers have been built, but we still rely on the 30 year old paradigm of using a mouse to interact with a computer. Tablet computers and PDAs were heralded as the next great thing, but were slow to catch on and difficult to use because the software was originally created with a mouse in mind, and was poorly adapted to the new technology.
With the iPhone, and more importantly the “touch platform,” Apple is once again reinventing how we interact with our computers. The touch platform is a completely re-imagined, intuitive way to interact with a computer. The iPhone and iPod Touch are just the beginning. By creating a whole new software platform, Apple has the opportunity to release a whole range of products that are based on the touch technology.
With the release of the iPhone Software Development Kit, Apple is enlisting the talent and creativity of thousands of entrepreneurs and programers to create a marketplace for completely re-imagined, innovative applications. Here is what one industry insider had to say about the iPhone SDK: “A revolutionary new platform is a rare and prized opportunity for entrepreneurs, and that’s exactly what Apple has created with iPhone and iPod touch. We think several significant new companies will emerge as this new platform evolves.”
The Opportunity:
Apple has made the barrier to entry very, very low. The charge to become a certified iPhone developer is only $99, and the tools to create iPhone software are free. They took it one step further and even posted how-to videos, sample code, and other resources online for free! Apple is investing heavily in making it easy for people to develop applications for the touch platform.
Not only are they making it easy to develop applications, they are also making it incredibly easy to sell and distribute those applications. When everything is released in June, customers will be able to go to the “iPhone Application Store” directly from their iPhone, or in iTunes on their computer. Buying and installing an application will be just a couple clicks away, and will require absolutely no technical understanding of the process. For application developers, Apple has also made it simple and financially compelling. Once an application is written and submitted to Apple, they handle everything… taxes, credit card transactions, accounting, webhosting, digital distribution… everything. For all these services and some built in marketing, Apple is charging a flat 30% off the top. A small price to pay when you consider typical manufacturing, distribution, and retail costs!
The Plan:
Having just wrapped up my last recording project at the recording studio, I’m in a unique place to be able to drop everything and focus on developing applications ahead of the the June release. Having at least one application available at the launch, should give us a strategic advantage. There will undoubtedly be hundreds, maybe even thousands of applications available at launch, but with such a short development time, there will also be quite a few developers who were overly ambitious and wont finish their application in time.
To take advantage of this opportunity in timing, and to set achievable goals in learning and programing, I have decided to create a series of very simple applications that should be relatively easy to program. Part of Apple’s philosophy as a company is that applications (and even hardware) should be built from a perspective of usability over having a long feature list or spec sheet. Sometimes a waffle maker that makes really good waffles is preferable to the waffle/pancake/kitchen sink/sandwich maker that sounds good on paper, but compromises in each function.
Elizabeth helped me come up with a name for the company. It is going to be called: The Application Cubby (AppCubby for short). The idea being that each application is a little cubbyhole where you can store information you’d like to track.
Here are a few ideas we’ve come up with:
- Gas Cubby - Track your gas mileage and fuel costs.
- Car Cubby - Track oil changes and other vehicle maintenance.
- Mileage Cubby - Track billable mileage for reimbursement or tax purposes.
- Time Cubby - Track billable hours or time spent on specific projects.
- Golf Cubby - Track golf score and handicap related information.
- Outfit Cubby - Using the built in camera, take a picture of yourself each morning. Then look back in time to see how long it has been since you wore a particular outfit.
- Run Cubby - With the built-in stopwatch, track your running regimen.
- Weight Cubby - Track your weight and other related physical stats.
- Lift Cubby - Track your weight lifting progress.
- Meal Cubby - Track your food intake.
- Grocery Cubby - As you run out of things mark them down and build a grocery list.
- Cash Cubby - Track and categorize cash purchases or other transactions.
- Doodad Cubby - Organize your closet, attic, or other storage area by taking pictures of what’s inside a box then tagging each item for easy search.
These are just a few of the many potential tracking applications that would be relatively easy to build, and reuse enough code to make each successive application easier to build than the one before. Not all of the ideas mentioned above are fully thought out, or even worth creating, but it’s a start. By creating these very simple, but compelling applications, and charging an impulse level $1.99 each, I feel poised find a niche in this very large and lucrative new market.
The Future:
Though there is very real potential that hundreds of thousands of dollars will come rolling in, there are many levels at which this venture could be successful.
In a very worst case scenario, the only people to purchase from the AppCubby are the 1,000 (0.01% of all users - $1,393 net) or so journalists who buy every single application available for review purposes. They give the applications a terrible review, and no one else buys a single copy. In this case, some of the investment will be returned, and I’ll have learned some very valuable skills that should help me move toward a career in programming.
If the AppCubby is moderately successful (only 0.1% of all users buy at least one of our applications - $13,930 net) there will be enough money to pay back a significant portion of the initial investment and move forward with the company as a part time venture that provides a small side income for me, and slowly pays back the entire investment, and is a long term trickle of cash for the investors.
If the AppCubby is reasonably successful (1% of all users buy at least one of our applications - $139,300 net) there will be enough to fully pay back the initial investment and allow me to work full time on new applications and updated features for the existing applications. The investors will make a good return on their investment and will have a continued source of income as future applications are released and new users buy the applications.
If the AppCubby is wildly successful (5%+ of all users buy at least one of our applications $696,500+ net) the initial investment will be fully paid back and we’ll have some tough decisions to make. Do we hire more employees and make a real business out of it? Do we attempt to sell the business and cash out? Or ,do we continue to milk it, slowly releasing additional applications as I have time to write them… keeping the overhead low, and the ROI high? Those would be very fun questions to ask!