Papering Over App Store Problems
Papering Over App Store Problems
This series of posts is about enabling sustainable businesses on the App Store. In Part 1 , I discuss why Paper and other productivity apps may not be doing as well as you might think. Part 2 explores why casual games, in contrast, are a sustainable business, but not a differentiator for platforms (I added a follow-up here ). Part 3 analyzes why Apple in particular seems hesitant to enable sustainable businesses on the app store.
On the occasion of the launch of Stratechery , I set Cosmonaut to iPad, and drew this:
Admittedly, compared to some of the stuff Made with Paper , my sailboats are nothing special. But for me, it was honestly a feeling I really didn’t anticipate: I drew something, and it didn’t suck!
Paper is a transformative, device-defining app, and has been awarded accordingly by both Apple and the design industry . According to App Annie , as of June 21, Paper ranked 7th in the Productivity category according to downloads (119th overall after a recent jump), and 4th in revenue (108th overall).
By every visible measure, FiftyThree, the makers of Paper, are the definition of an app store success story, and this week they closed a Series A round of financing led by Andreessen Horowitz.
It’s easy to see this as a big endorsement of the App Store: startup creates a breakthrough product, gets noticed, gets funding, changes the world. And perhaps that’s the path FiftyThree is on.
But there’s another scenario that may be in play, and if I were Apple, this round of funding and FiftyThree’s plans going forward should be a yellow flag that the App Store may not be as strong as it could be.
Some pertinent facts about this round of funding and the circumstances leading up to it that deserve a closer look:
- As recently as January , FiftyThree had the same five employees they started with . In the intervening five months, they have quadrupled the size of their team.
The positive spin is that business is good, ideas are large, and amazing products are on the horizon. The more pessimistic view is that FiftyThree has decided they need to “Go Big or Go Home”. In other words, while they were an App Store success story, the revenue they generated wasn’t sufficient to support five employees, so they’ve decided to take their shot at massively increasing revenue.
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Last October, Paper added the Mixer for a $1.99 in-app purchase. This was the first new additional item for sale beyond the original pencil, marker, pen and paintbrush (available for $1.99 each or $6.99 for the set).
Then, this May , Paper gained the ability to zoom in a really unique way. It was a major feature request, yet surprisingly, it was completely free. No in-app purchase required. Perhaps FiftyThree just loves their customers. Or perhaps this is the sign of a new business model.
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According to FiftyThree’s blog post announcing the funding, they are looking to focus on collaboration and hardware.
The positive spin is that these are really interesting areas to take a creation app; imagine the possibilities!
But the truth is I really struggled to find the positive spin; collaboration and hardware, while interesting, seem counter to the original Paper vision :
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