An introduction to mobile app development and investing

MOBILE APPS
Charlie Morris, iOS developer
An introduction to development and
investment options

HELLO!
‣ iOS developer at Mind Fund Studio
‣ Previously worked in Venture Capital at AAIC Ventures
‣ Originally a suit wearing management consultant in London (for 5 years)
CHARLIE MORRIS

AGENDA
‣ Brief overview of the mobile app market
‣ Understanding your app development options
‣ Investment tactics: How to get started with app valuation and investing in mobile
apps in Hong Kong

THE MOBILE APP
MARKET
MOBILE APP DEVELOPMENT AND INVESTMENT

...IS MASSIVE
AND
GROWING
MOBILE APP MARKET

Source: Statista 2015
SMARTPHONE SALES ARE ASTRONOMIC

ANDROID DOMINATES DEVICES

MORE ANDROID APPS ARE DOWNLOADED THAN IOS
Source: AppAnnie
Note Over 100bn cumulative iOS downloads

BUT IN TERMS OF REVENUE...
Source: AppAnnie

‣ Paid app
‣ In app purchases (often associated with
"Freemium")
‣ Subscription model
‣ Advertising
- Direct advertising (banner / full page)
- Indirect (sponsored content)
4 MONETIZATION METHODS

ONLY 9% OF IOS
DOWNLOADS ARE
PAID...

...TOTALING
$34,990,000,000

IN APP PURCHASES ARE KEY
Source: AppTopia
Note: More case studies at http://www.bluecloudsolutions.com/blog/13-top-grossing-apps-revenue/#

Games is the
largest genre
on the Apple
app store

IT IS A HUGELY COMPETITIVE MARKET
Source: LukeW Ideation and Design

DEVELOPMENT
OPTIONS

1. What platform should you develop for?
2. How should you develop for your chosen platform(s)?
3. Should you build it yourself or get help?
3 KEY DEVELOPMENT QUESTIONS

1. WHAT PLATFORM?

‣ iOS
‣ Android
‣ Windows
‣ Blackberry
‣ FireFox OS
‣ Sailfish
‣ Tizen
‣ Ubuntu
‣ Others...
APP PLATFORMS

‣ Smartphone
‣ Operating system
‣ Marketplace (App Store, Google Play, etc)
‣ Payment infrastructure
‣ Additional Services (iCloud, Game Center, etc)
‣ Marketing tools
‣ Developer tools
‣ Integration with other devices (IOT, wearables, iBeacon, etc)
ECOSYSTEM CONSIDERATIONS

‣ C level executives are more likely to own an iPhone
‣ Finland has a higher propensity of Windows Mobile
‣ Africa and Latin America have a deeper penetration of Blackberry
MARKET CONSIDERATIONS
What does your target market look like?

WHAT ABOUT HONG KONG?
‣ Mobile:
24%- iOS
74% - Android
2% - Other
‣ Tablet:
82%- iOS
17% - Android
1% - Other
Source: ComScore

2. HOW TO DEVELOP?

APP TERMINOLOGY
WEB APP NATIVE APP HYBRID APP
‣ Mobile-optimized
webpages that look like
an app
‣ Accessed through the
phone browser
‣ Not on any app store
Built in native code for a
specific operating
system
Downloaded from an
app store
Can use all device
features
‣ Built in web languages
for use on multiple
operating systems
‣ Downloaded from app
stores
‣ Can use all device
features (kind of)

WEB APPS
‣ Refers to websites that behave like applications
‣ Advantages:
- No need to install app
- Easy to share and organically spread
- Instantly updated on the server-side
‣ Disadvantages
- Not on the app store... is it even a "real" app?
- Device capabilities - push notifications, GPS, camera, etc - are unavailable
Note: iOS 1 had no app store; this is all we could do then!

NATIVE APPS
‣ Apps built using the toolset that Apple or Google
provide
‣ Advantages
- Able to use all of the device’s capabilities
- High performance
‣ Disadvantages
- Need to start all over to build app on the
other platform

‣ IDE (integrated development environment): Xcode
‣ Languages: Objective C / Swift
‣ Testing: Simulator / device, Testflight
HOW DO YOU BUILD IOS NATIVE APPS?
DEMO

HOW DO YOU BUILD ANDROID NATIVE APPS?
‣ IDE: Android Studio
‣ Languages: Java
‣ Testing: Simulator / device

‣ Camera
‣ GPS
‣ Accelerometer
‣ Microphone / Speaker
‣ Local storage
‣ Vendor APIs
‣ Touch Gestures
TECHNICAL BENEFITS OF NATIVE

BIG PROBLEM WITH NATIVE...
TWO
CODE
BASES

HYBRID DEVELOPMENT

‣ Hybrid development combines the best (or worst) of both the native and HTML5
worlds
‣ It is a web app, primarily built using HTML5 and JavaScript, that is then wrapped
inside a thin native container that provides access to native platform features
‣ PhoneGap is the original and popular container for creating hybrid mobile apps
WHAT IS HYBRID DEVELOPMENT?

HOW DO YOU BUILD HYBRID APPS?
‣ IDE: Text editor of choice / terminal
‣ Languages: Javascript
‣ Testing: Chrome / device (depending on framework)
DEMO

‣ The beautiful, open source front-end SDK for
developing hybrid apps
‣ Creator makes it easy to rapidly build Ionic mobile
apps, with a drag-and-drop interface and real code
exporting
‣ Can be tested on the Ionic app in iOS and Android
IONIC - CURRENT BOSS OF HYBRID

‣ Any sort of online component requires a backend service (API)
‣ This backend could be custom built: Node.js, Ruby on Rails, PHP, Python,
ASP.NET
‣ Or you might be able to use a Backend as a Service provider: Parse, Firebase
‣ Or perhaps all you need is integration with an existing service provider: Facebook,
Twitter, Dropbox
BRIEF WORD ABOUT THE BACKEND

3. BUILD YOURSELF OR GET HELP?

WIREFRAMING FIDELITY
LOW MEDIUM HIGH
www.balsamiq.com www.sketchapp.comPen and paper

‣ Shoutem
‣ Mobile Roadie
‣ Mag+
‣ Adobe DPS
‣ Como
‣ GoodBarber
‣ AppPresser
‣ AppYourself
AN INCREASING NUMBER OF WYSIWYG PLATFORMS
‣ AppMachine
‣ Mobincube
‣ BIZNESSAPPS
‣ MobAppCreator
‣ AppMakr
‣ Apps-Builder
‣ AppyPie
‣ IBuildApp
‣ BuildFire
‣ Appery.io
‣ Gamesalad
‣ MobiCart
‣ app.cat
‣ AppNotch
‣ EachScape
‣ Zoho Creator

‣ Online courses:
- Codecademy
- Treehouse
- CodeSchool
- BitFountain
- Ray Wenderlich (iOS)
‣ Real life classes:
- General Assembly (*wink*):
DIVING INTO PROGRAMMING

‣ Agencies in HK:
- Mind Fund Studio (*wink*)
- Altitude Labs
- 42 Labs
‣ Freelancers:
- Locally (check out co-working spaces)
- Globally (Crew, Upwork, Freelancer, etc)
BUYING DEVELOPMENT SKILL
Reliable
Expensive
Unreliable
Cheap

INVESTMENT
TACTICS

WHAT TO LOOK FOR?
‣ If pure software:
- Exert extreme caution - easy to replicate
- Look for technical sophistication and prowess
- Look for exceptional marketing skills
‣ Hardware meets software is a local strength
- Insight robotics, DJI, Snaptee
‣ Hardware meets software meets logistics meets crack marketing... the dream

‣ Co-working spaces: Blueprint, Cocoon, Garage Society, Paperclip, GoodLab,
Cyberport, Metta, etc
‣ Universities: HKUST, HKU, etc
‣ Crowdfunding websites: Investible.vc, EastFounder, etc
‣ Accelerator programs: Nest, DBS, Cyberport, Blueprint, etc
‣ Events: Rise, FinTechHK, Startup Weekend, Hackathons, etc
WHERE TO LOOK?

‣ Technical audit:
- How can you gauge degree of sophistication?
- Who can you trust to evaluate the technology?
‣ Developer commitment:
- High demand for developers and low supply
- Very fluid industry
CHALLENGES

‣ Analysis of revenue traction over time and overall profitability of the business
model:
- User growth is hugely speculative
- App usage is similarly speculative
‣ Tangible assets?
‣ Previous rounds?
VALUATION

‣ Tranches investment offer; offering a tiered incremental investment stream based
on the owner executing to milestones correctly
‣ Backing experienced (ideally successful) founders
‣ Obtaining character references
DE-RISKING

THE MALE OR FEMALE APPROACH?

INVEST AND PRAY

Q&A

E: CHTMORRIS@ICLOUD.COM
T: @CHTMORRIS
W: CHTMORRIS.COM
THANK YOU!
CHARLIE MORRIS

An introduction to mobile app development and investing

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