Building a profitable mobile business without featuring paid user acquisition
If you haven’t heard of Avakin Life, our 3D virtual world for meeting new people, it’s just fine. It’s a comfortable confirmation that our targeting works – even though we haven’t spent money on mobile advertising. We are Lockwood Publishing and a sharp focus on getting in front of the right audience has allowed us to chalk up 17 million installs, build a robust and loyal community of app advocates and – more importantly – lay the groundwork for a successful and sustainable business that is entering a new phase of growth.
This exciting outlook is linked to the realisation that the app stores – though fatally flawed – are also full of hidden and untapped opportunities, provided you know where to look and, more importantly, how to look.
It all starts by borrowing a page from the must-read business book from two INSEAD professors, written nearly a decade before mobile games got hot, to identify the ‘blue oceans’ of apps. It’s here that you can potentially make the biggest impact and the most money. By way of background, the blue ocean approach is about moving past head-to-head competition (because it mostly results in nothing but a bloody ‘red ocean’ of rivals fighting over a shrinking profit pool). Instead, clever companies seek to find or create ‘blue oceans’ where the competition is irrelevant. That’s the theory.
And we didn’t get there overnight. Our first attempt back in 2014, failed miserably. But, viewing this set-back through the lens of what I call the ‘Blue Ocean Mindset’, has allowed us to lay the groundwork for a sustainable success.
Ironically, we started out in the “red ocean” – betting we could hit it big with a poker game and unaware we were in fact swimming in a market brimming with similar games and rival studios. The idea was to test the waters with the poker game, just one of a number of titles we had produced, to determine what flies and fails, and then quickly “rinse and repeat” to cash in on user trends and tastes. To this end we released two apps: a poker game app and an avatar app allowing users to tweak the entity they used to play the poker game. At that time, we firmly believed that apps that were connected would allow us an excellent avenue for cross-promotion to boost not one app, but the whole “app family” to new heights.
We were sure the poker game would have some commercial success – but it didn’t take off. Instead, an exceedingly (and unexpectedly) high number of organic installs of our avatar app told us that users were sold on it as a standalone app. Seeing this through the lens of the Blue Ocean Mindset opened our eyes to untapped growth opportunities and taught us three valuable lessons.
#1 Probe the stores. Do something that allows you to get some real data on where you’re likely to get free downloads before going all-in. In our case we came up with a cost effective way to publish minimum viable apps relatively quickly. It’s a better use of both to use the exercise (as we did) as a kind of litmus test to identify your winning app. Let your organic installs help you pinpoint the Blue Oceans where app demand is under-served. Get it right and you can fill that void with your app. Following this strategy allowed us to see – and realise – the hit potential of Avakin Life, our flagship app that had reached 14 million organic installs (and counting) without spending on UA. Adopting a Blue Ocean Mindset will allow you to find your niche and focus your efforts. But don’t settle for copying others. Go your own way with an app that will set you apart from the rest and let your organic installs be your guide to a market where you can truly make your mark.
#2 Keep a sharp focus on under-served users. Don’t just use your Blue Ocean Mindset to identify uncontested game categories and markets. Unleash it to identify and acquire the user demographic your competitors missed. Early on, we saw that predominantly male teams at games studios, free to build the game they always wanted to play, were in fact releasing games that would attract and monetize an audience of their peers. Young males over the age of 18 were making games for – you guessed it – young males over the age of 18. You don’t have to be a rocket scientist to figure out that competition for this demographic would rocket UA costs through the roof. We took a deliberate detour around this free-for-all and stepped up efforts to acquire young females over the age of 18, a demographic that was comparatively cheaper to acquire and monetize, and also completely ignored by competitors making apps to their own tastes, not those of their users. (Later this phenomenon would be documented by Developer Economics, the research series from VisionMobile, which surveyed thousands of app developers and concluded that the vast majority doesn’t plan their apps based on what their users want; they decide which apps to develop based on their own needs.) With our app category (role-playing) and demographic (young females) in perfect alignment, the way was clear to scale our numbers.
#3 Cultivate talent to get you to the top. Adopting the right mindset and paying attention to the right metrics will put you on the right path — but it will only get you so far. You need a talented and motivated team to get your goal. To attract — and keep — experienced people who are determined to do what it takes, we took a different approach and implemented an epic bonus scheme where we share a full 50% of our quarterly increase in profits with the team. Putting a high premium on high performance has helped us rise up the charts, allowing us to carve out our spot in the top 300 grossing apps in the U.S. app store. Today there are no signs of our app — or team — stopping. It’s easy to imagine that, when we break into the top 50 apps, that the pot of profits to pay out in bonuses to our tight-knit and talented team will become life-changing. A winning team is one that shares the vision that drives you to succeed and should therefore share in the benefits that result when you arrive where you want to be.
Adopting a Blue Ocean Mindset has unlocked our potential to create an app category and carve out a lucrative niche at the intersection of avatar apps, role-playing games and entertainment that allows users to connect and get acquainted. The last months have seen us take our app up the charts — without spending on UA. But the next years will see us take our business to the next level, harnessing this amazing mindset to optimise our app, increase user engagement and – ultimately – boost our shared profits.