That's a good question, and we'd like to to tell you the answer. Originally, Gym Hero wasn't a free app. We started at $0.99 to get a feel for things. We didn't really care about sales, we were so proud when we made a (read: one) sale on the first day! But let's rewind and explain things.
The first month
Gym Hero is a two man gang: Jannik and Jannis. We do this on the side, but decided to found a company in case some patent troll or someone with more money than us (i.e. any money) finds something to sue us for. In germany that comes down to about 500EUR in fees for legal stuff. Work on Gym Hero started in 2010, but we didn't get our act together until 2011 when Gym Hero was released on September 30th.
Whoa. One sale on the first day, and then close to fourty. Good beginning, we thought, now it's gonna rise. This chart shows that we were wrong. Some interest spiked, but the sales were going down. At this point, Gym Hero was only available in the stores of english speaking countries, since we didn't have translations yet. That lean startup thing, you know...
Itnl.. Intren... Internationalization
So that month didn't look good. We got our act together once again and invested some time (our friends' time, to be fair) in translations and added some mini features. At this point, Gym Hero was a MUP (minimum usable product). The viability, well, just look at the chart above. So October 31st, the day of our international release, drumroll.....
OK. A little bump. At that point we thought again that it would go on. We didn't know that a little spike in sales always happens after an app is updated. So that didn't work. We weren't happy with the numbers. Was there no market? Did our app suck? What was going on? We built something cool after all!
Is there a market?
Bummer. Gym Hero didn't take off at all. To find out if there are people who are interested in gym workout trackers for people who actualy go to the gym we decided to make Gym Hero free for a weekend. Since it was only $0.99 before, we didn't expect much from this. We couldn't imagine that people who don't think twice about buying a $6 coffee without blinking (admit it, that's most of us) and get drunk on $14 cocktails (yeah) would mind spending less than a buck to try out an app.
Whoa. Close to 10k downloads. And all we did was a little advertisement on twitter and facebook, to all our 38 followers. Yeah, there's download bots, people who would download anything that's free. But fuck it, there are people who need a gym tracker like this! Good ego boost for us, we kept hacking away at night and on the weekends.
The price is part of the product
While it's true that the price is an important part of the product (looking at you cosmetic products industry), I don't think this holds true in the app market. We experimented with a higher price than $0.99, but the revenue was about the same. So we went back to $0.99 because while earning the same amount of money, we could give the joy of Gym Hero to more people.
After we earned roughly what we spent to found the company, we decided to make Gym Hero free forever on December 9th. You see a spike where up to 600 copies (ha) of Gym Hero were downloaded per day. The typical bump again, followed by a drop.
Since then, the numbers have developed quite pleasantly, and our reviews are quite good - we're at a 4.5 star rating at the moment, and all the ratings are real.
iOS users are cheap
Ok, that headline was a little lurid. But... iOS users wallets are quite open, obviously. But not when it comes to testing out apps. The $0.99 I expected to be a non existant barrier to trying apps is actually quite a large one. It's irrational, and there are so many apps that are way too cheap, because they help you so much more than a coffee/cocktail/drink that costs 8 times as much. But that's how it is, and we gots to:
That's right! The guys over at appannie.com published a great Infographic the other day which show that in app purchases are going up, and thats:
How we want to make money
We pushed updates around every 5 weeks. We listened to our users heavily, involved them in testing, did small iterations and quick development/release cycles. It has payed off. People are loving Gym Hero, and we got some super things coming up (which are in review at apple as we speak). Gym Hero is at a point now where it is really quite useful and thousands of people use it every week. But it is free. Not making any money.
That's OK, because we do it in our spare time, but at some point, it has to pay off. So we decided to build something that's free and really rocks for 80% of the people, and add some even nicer things on top of that for the 20% of our users that are really ambitious fitness junkies. Our hope is, that they will be happy to pay a little bit for something that is of great use to them - and it's always going to be cheaper than a latte/cocktail/drink per month ;-)
So here you go, David, we want to make money later by adding pro features. Until then, we'll add a "donation" in app purchase for people like you. :-) Thank you for spiking this blog post - I think I have to write more about how we did the initial PR (incl. a hacker news story), how we involved our users since day one, how we track KPIs, etc. pp.