Andrew: Before we get started, tell me if you’ve got this problem. You’ve got a great product, but you’re not getting people to even try it, let alone buy it. Well, the problem is probably that you’ve got too much text on your site, but check out what these startups have done. Here’s Snap Engage, they’ve got a video explaining their product right underneath the free-trial button. Here is Send Grid, right next to the get started button is a video explaining the product.
Video, much more than text helps people understand what you’ve created and convinces them to try it and buy it, and the company I recommend that you turn to for this, it’s Revolution Productions, same company that did both those startups, and many other videos. Revolution-Productions. And when you go to their site, Revolution-Productions.com, and contact them, I want you to talk directly to the founder, Anish Patel. Tell them I sent you. They’ll take great care of you and make sure you have a good video that convinces people to try your product.
Next sponsor is Grasshopper.com, and I want you to think of them as adding super powers to your phone. Want extensions, you can add it. Want a phone number that catches you anywhere you are? You’ve got it. Want to take your voicemail messages, maybe, and convert them into text? You’ve got it. Anything that can be done with a phone–pretty much anything–I can’t imagine what you can’t do, Grasshopper.com will do it in a very user-friendly environment so you can keep adding features and adjusting them yourself. Grasshopper.com.
Finally, Scott Edward Walker is the lawyer that I’ve been recommending long before he even paid me for sponsorship. I don’t know, Scott, why you even bother paying me. I’ve been telling people for years to try you, but you do. So, I’ll tell my audience right now, if you need a lawyer, if you’re an entrepreneur, especially if you’re a tech startup entrepreneur, go to the lawyer that I recommend. And as you can see on this website, Jason Calacanis, Neil Patel, and many other entrepreneurs recommend, Scott Edward Walker of Walker Corporate Law. All right, I’ve talked too fast and for too long. Let’s get right into the program.
Hey, everyone, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, and where serious, successful entrepreneurs tell their stories so that you can pick up on some of their best tactics and ideas and hopefully apply it to business and come back and do that today’s guest is doing.
So, imagine this, before I introduce the guest officially. Imagine you get into a terrible car accident and find yourself in the hospital. What do you do? Today’s guest, Chad Mureta, decided to build his first IPhone app. His app was called FingerPrint Security Pro, and went on to do over $100,000 in revenue. Chad says he has since gone on to earn millions, thanks to Mobile apps, so I invited him here to Mixergy to tell the story of how he did it. Chad, welcome.
Chad: Thank you very much. I’m glad to be here.
Andrew: I said over $100,000 in sales, right? How much did it end up doing total? What was the number?
Chad: Well, Fingerprint actually did overall about $500,000–one app, $500,000, something like that. But, we branched out. I’ve done probably 40 apps since then.
Chad: So, that was the first app that kind of got the momentum going, and showed me what was possible in the space. So, it was pretty exciting.
Andrew: I want to give people an idea of what the app does. I have it on my phone, but I think just a short description from you might be clearer for people, and help them understand what that first app was about.
Chad: Yeah, so for me, you know, I got into the industry pretty much with no experience at all. And for me, it was just about, OK, how do I get into it with not a lot of money and to try to build something that most people, like a huge demographic could actually understand. From my car accident, I thought about securing the phone, ‘cuz a lot of people were grabbing the phone and stuff like that. So my immediate reaction was that I needed to secure this thing. I ended up calling this company from India, and started working out some things with them. And I really thought–this is how much of a newbie I was–I really thought that I could actually take the phone and secure it with real fingerprint technology.
And so, I forget how long, probably two or three weeks into the process I found out this wasn’t possible. And so, I was a little let down, and then I stopped and asked myself, OK, what could this do? Could this really stop people from getting into the phone if they didn’t have an IPhone? And the answer was yes.
And then I said, OK, is there a demographic big enough for people that would, you know, kids that would prank each other. And could I make it really cool, really James Bond-ish like, for people to get excited about it? So that’s where it kind of began. I started trying to think outside the box and try to get some graphics involved, and stuff like that. I really didn’t realize the potential of it until it hit the market, and started blowing up.
Andrew: And so, what happens is, let me see if I’ve got this right. A person puts their finger up on the screen of the iPhone.
Andrew: This iPhone vibrates, I think it’s like three times, does this little tricky thing where it looks like it’s scanning it like a copier might scan a finger.
Andrew: And it says processing and it looks like it’s searching for a thumb print. So it shows what seems to be my thumbprint and bunch of other thumb prints come up on the screen. Then it says at the end of that, either, “a match”, or. “There isn’t a match,” and there’s a trick of getting the app to know that it’s you, but basically you’re telling it it’s you, and telling it whether or not to find a match. That’s basically it.
Chad: Yeah, you can recognize it; it’s based on what you touch on the screen. So a lot of people that aren’t familiar with it or the iPhone will scan it and it looks so real that a large portion of people think it’s real. You have a way to disable it or to active it depending on which button you push, it’s a hidden button on the screen.
Andrew: All right. So it’s kind of like a fun magic that you can show off to your friends a few times and play around with.
Andrew: I get it. Now what I’m curious about is you said that there was a company in India that you contacted. How did you have a company in mind to contact when you have an idea like this?
Chad: Yeah, go question. I really didn’t and to go back through that process and find out how I did it, I was in the hospital, I was thinking of different ideas. I’m not sure exactly how I found them. I think I did a couple of searches and just made a couple of calls. Something about me is I’m always, if it takes me 15 calls, it takes me 15 calls, like I’m after a certain outcome. So I don’t know how many calls it took me or who I talked to find out how to contact them.
But what happened was, I found them in New Hampshire, so they had an office in New Hampshire and they basically do all the developing in India. So I told them, “Hey, I’m new at this. I don’t know anything about code. I’ve owned a couple of real estate companies before. I’m just getting into this business. Can you kind of hold my hand through this process while I come up with idea?” I went and I met with them, and they seemed very cool, and that they did just that.
Andrew: Okay. You said you had some real estate companies before, tell me about the businesses that you ran before?
Chad: Yeah. So I’ve owned a newspaper company. I’ve done some real estate where I’ve bought some houses, fixed them up and sold them. During the boom I got all excited after I had made a couple of real estate deals and decided to open up a real estate company in Myrtle Beach, South Carolina. So where a lot of people went in and bought houses in 2005-2006, I actually bought a real estate company and then opened up a second one during that time. So that really tested my endurance to get through that. So I owned a couple of real estate companies and mainly did residential, some commercial. I had about 20 agents.
Yeah, when I got into my car accident I still owned the company. So that was what was interesting is being in the hospital trying to manage those companies and then figuring out, “Okay, there’s a better way to make money. There’s a better way to be happy. I’m completely burnt out. I’m managing all these different things.” It was a tangible business where I really had to be there. When I realized, “Okay, this isn’t going to work. These companies are going to go down the tubes because I’m not here. I have to figure out a way that I can make money while being in the hospital, while sleeping, while going on vacation. There has to be a better way.”
Andrew: Can you describe one of the problems that you were having? I want to get a sense of what the frustrations were because I think sometimes online we image the people who have offline businesses have it easy because they have actual stuff to sell, because not every kid in high school can up with a competitive product, because they actually have people who are helping them. It sounds like you did at your business. So give me description of a frustration, of a specific experience that will help me understand what you were going through.
Chad: Okay. So a lot of the people they were very familiar with me and they’re very familiar with my name. For me it was, I was the company. So if I was away people would call up and say, “Hey, can we speak to Chad? We want him to list the house.” I did have agents underneath me, but again, I was the leader. So if you’re not the leader you’re not there kind of directing the flow. A lot of times things just kind of fell apart.
So a frustration for me was, when I was in the hospital and I wasn’t present with my business there was nobody else that could kind of jump in, it wasn’t automated at all. So as soon as things aren’t being managed properly and people let are listing their house are saying, “Well, we’re not going to list it.” Or buyers that I was working with went to another agent then I wasn’t bringing in any income. My income was dropping significantly.
So that was very frustrating for me to realize, “Okay, if I’m not at my business, if I’m not present, dressed up, motivated, trying to make things happen then I really don’t have a business, my business is me. So for me that was the transition of being frustrated and knowing that things are going down the tubes and really knowing that I couldn’t fix it. There was nothing I could do. I’m trying to make conference calls in the hospital, but there’s only so much you can do when nurses are going back and forth.
Andrew: All right. I don’t want to skip ahead in the story, but give me a little view into what happened afterwards. Did the Internet business, the mobile app business enable you to run a business without being present all the time. Or did you find the opposite was true afterwards, that you still have to manage it to come up with clever ideas, sell advertising, and so on?
Chad: Yeah, so, good question. Immediately, you know, in the first week it started making money–and all around the world. I wasn’t doing anything, actually. Then I looked on my calendar and saw that the money was being directed to my account, so a lot of light bulbs went off and got me very, very excited. Yeah, it was automated, definitely, and I had to work maybe a few hours a day. I got complacent, like most entrepreneurs do. I guess, after the first month or so I wasn’t doing that much, and my company started to go down a little bit, and I realized, OK, I need to be more present with my business than I’m being; but a completely different dynamic. A completely different dynamic.
Instead of having 20 agents working with me, it was pretty much just me. I had to develop the development team in New Hampshire, but yeah, checking my business, being present, trying to figure out what I’m doing. But I didn’t do ad revenue until probably six months after, seven months after.
Andrew: So, you were selling the app at first, and that’s where the revenue was coming from?
Andrew: I don’t want to go too far into the future yet. I want to dig into every step of the process. So, why don’t I start with, how much did it cost you to get that first version of the app up, ready to put into the app store?
Chad: It was $1,800. I remember doing an update probably three weeks later for about $500, just making the graphics a little bit better, you know, making some of the copy better. But, yeah, it cost me $1,800 to start.
Andrew: So, I’ve got a course here at Mixergy where we teach people how to have iPhone apps created, and a woman who runs it. Walk me through the full process. It seems easy, and you’re telling me it’s $1,800; again, it seems easy. Aren’t there any frustrations along the way when you’re trying to communicate to someone how to develop something, and you’re not a developer? And you’re trying to communicate to someone how to design something and you’re not a designer; when you’re trying to communicate to someone how to build something from scratch and you haven’t built anything like it before. Tell me about some of the difficulty. I don’t want to make it seem easier than it really is.
Chad: Especially not being from that background, computer science, dealing with people and trying to speak their language, so to speak, it was definitely difficult. And a lot of learning lessons for me was, get on the page immediately. So, start off very slow. For me, I just went right for it, because it was a must for me. I realized I had to do something, because my income was dropping dramatically. But, I learned a lot that first thirty days, and what I learned was, you know, really spend some time, getting rapport with your team, and figuring out first of all how they want to be communicated to, and how you’re looking to communicate.
For me, I draw things out, and I say, hey, this is what I’m looking for. Some people do screen shots, some developers want screen shot models. Just figuring out what the process is like, what you can expect, what they want, I think is very, very important, because I didn’t do that in the beginning at all. So, I learned the hard way.
Andrew: So, for example, when you were drawing on a piece of paper what you wanted and you essentially said to them, guys, I want this, what happened? What was the problem with that?
Chad: The problem was that, first of all, I’m a bad drawer. I can’t draw at all.
Chad: And I was opposite handed, ‘cuz my left arm was a little messed up. The problem, too, was I didn’t know what I was doing, so I didn’t research the market well enough, and I didn’t have steps lined up. Most people, what they do is they say, hey, I have an idea, this amazing idea, this is what it is. And it’s very superficial. It could be an unbelievable idea, but they have no idea about the marketing. They have no idea of what the demographic is. They haven’t spent enough time really being inside of the field to know what they’re talking about.
So, for me, I was that superficial guy, running up there, just trying to make something happen. And luckily, being in the trenches I learned a lot. You know, I learned it’s like going down a black diamond your first time skiing; you’re going to take some falls and some bumps.
Andrew: Tell me about one of the falls; be specific about the problem, so that we can really see your experience and understand what you went through. Give me one specific issue, early on, when you launched the version one.
Chad: Yeah, so, the app was only supposed to be, I think, like $850.
Andrew: $850. OK.
Chad: And, for me, I didn’t realize how much it costs to design things, put things together. So, I’m thinking, hey, $850 . . .
Andrew: Let’s take a pause here for a second; the connection is going down. All right. I see it’s better. So, you were saying, hey, you thought it was $850. I can probably have as many of these as I want created, right?
Chad: Yeah, and I could have as many iterations as I want. So, when I got it back, and it wasn’t the way I wanted it, I said, ‘Hey, guys, this isn’t at all what I was talking about. Let’s work on this.’ And again, I wasn’t that specific, you know what I mean? I wasn’t actually specific with exactly what I wanted, and the more clarity, the more you can give them, then the better that it is. For me it was interesting because I started off and I expected everything to be perfect, and come back to me exactly how I wanted it and it didn’t happen at all.
When I got it back the first time I said hey guys, let’s fix this and they said, that’s going to be another 3 or 4 hundred bucks. And I put on the brakes and said, excuse me that’s not going to happen, I already paid, and the said, yes, every time you do this you’re going to have to continue to pay more money. And that hurt, because it’s a shoestring budget I was trying to put this together with.
So it’s not like I had all this money that I could continue to throw at this project. So that cost me obviously almost double, it was even more than double when I got done with it. I kept doing iterations, and iterations so one thing to know is, how many iterations do I get to make this the way I want it. So be as specific as possible, and then also try to get at least three to five iterations [inaudible] back and forth in that price, instead of like an hourly price, that’s what I would recommend.
Andrew: And this is Jen Gordan who’s actually leading the core. She actually said design the app on a piece of paper, she goes through the process of how to figure out who’s the app going to be good for, who’s going to use it. What the personalities are of the people who are going to use it. And then she says, sketch it out by using software that will make it look like a real app. Mark it up with a description of what each button does. How do you feel about that, would that have gotten you closer to say $850 or $1000 if you were able to go through that process?
Chad: Yes, I think it would have, definitely, that’s good advice, that’s a good way to set it up. And then just being clear with them what they’re looking for again. How do they want this exactly, but the more information the better it’s going to be, because the closer to that bulls eye you’re looking for, the arrows going to land. Instead of just shooting it out there. That’s what I pretty much what I did. And I think a lot of people do that.
Andrew: Well, I’ve got to tell you Chad 1800, 800, it’s all pretty inexpensive for a first app that ends up doing , as well as it did. Now, you’ve got this app, interesting concept, fun little app You get it in the store how soon before it starts to sell, what are the first few days of sells like?
Chad: It was about, the first day the first few days it was about 300 downloads. And then it started going up from there, so that’s what really shocked me, I said holy cow, this things actually working.
Andrew: So It’s like .99, right, per order? So that means first day, 300 bucks?
Andrew: And what gets it rolling beyond 300, how do you go beyond that?
Chad: So there’s a natural flow where, it kept going up and it was one on the first apps like it, so again, staring out, you know, brand new in the infancy of the iTunes was very important. What happened for me was, again I got complacent, so I said, OK. I can make all these apps, make all this money, and I start producing more apps, and I started thinking that I knew pretty much new everything, and I learned pretty quickly that I didn’t. So as soon as I saw things starting to level down, then I had to go into my tool box and say, how do I bring this thing back up.
Andrew: Let’s pause, and I’m sorry to pause the story, but this is such a good, important story to be told, that I want to make sure to get as many details as possible. So what I’m curious about is, you put your app in the store, like at this point thousands and soon hundreds and millions of people are going to do, for some reason yours gets sales on the first day, when others end up languishing in the store. Why do you think it did so well so quickly, what did you do that other people aren’t doing?
Chad: For me, a component was luck, and he the other component was just how it looked. Where I really wanted really good graphics and they delivered, they delivered on the graphics. So I wanted it to look the best as possible, and make it really like this James Bond-ish looking feel. And a lot of these apps, they don’t have that type of look. Now they’re starting to evolve that way. Especially in the beginning, people were just throwing anything up there. And for me, I knew I had to get quality out there that looks really, really good. So if somebody sees a screen shot a natural flow from icon to the description to the screen shot and then [inaudible] that they go ahead and buy it. I call the 10 second 30 rule.
Andrew: What about the name?
Chad: Finger Print Security, it’s definitely a very good name, it tells exactly what the thing is looking to do. And for me, again, I wanted to jump in there and get that cool factor. Get people going in and pranking their moms. Because again, the iPhone is really new, so you had people all over the place going and doing that, and having a blast. And I still get people coming up to me that are telling me stores, I did this I did that , and it still works, and a lot of people have an iPhone now,
Andrew: It does feel like the kind of app you want to show to somebody, quickly, and say look, check out how this iPhone app will read my fingerprint and give me access but it won’t do it to you. What about the description did you do that you think helped influence sales?
Chad: Description was somewhat short, so it told what the app was doing, but it also gave it a flow. So I remember giving a couple juicy paragraphs and then saying, “Check out the screenshots below and see for yourself.” And so, again, a lot of people, they write a huge description and the customer gets lost in it. They just want a couple snippets, it looks great, and then we look at the screenshots and the screenshots pretty much sell the app.
Andrew: OK. Later on we’ll talk about how you got really good at SEO. You even came up with good company names that encouraged high ranking in the iTunes store. But, was there any SEO or any thought of search engine optimization within the iTunes store when you first launched it?
Chad: Not really. I did the title, and, you know, the title’s definitely a big keyword. And then, you know, I put a lot of keywords in there thinking of kids and stuff like that, so there was on a small scale. But I didn’t look anything by that because I really didn’t have any experience. It was a learning thing. I mean for me, I change quickly, so I measure and try to see, “OK, does this work? Does this not work? Let me change the keywords.” But at the beginning there wasn’t too much thought on how that was going to work.
Andrew: So, I spent a lot of time looking at the app, as you might see from the questions that I’m digging into here . . .
Chad: Yeah. Yeah.
Andrew: . . . and here’s what I thought. It said it’s a first app, and one of the reasons it works is it’s dead simple. There aren’t that many screens, it doesn’t do that much even to this day, he picked the first app that was simple to create and simple to manage, and it also had . . . It was a gimmick, so it caught people’s attention and it was simple to understand the gimmick. So am I picking up on some of the reasons why it worked out?
Chad: Yeah. Again, it’s the simplicity of the iPhone, right? Than an 8-year-old or an 80-year-old can pick it up and understand kind of what it does. And it’s about showing off the phone. It’s about being interactive. So, you know, this phone came along and you have these apps in the infancy [sounds like], and even now where people could just pick up the phone and they could start playing with it. And, you know, it was kind of the first mobile device where they could really soak up their time and start showing off this thing, what it could do. And showing their friends, and the virality factor. And I think for me, I didn’t want to make it complicated. I didn’t want to jump in there; I wanted it to be very simple. And luckily, it hit well enough where everyone could understand it and people would tell their friends, and that’s what [snaps fingers twice] kind of started the whole flow.
Andrew: I promise I won’t spend all the time in this interview just talking about the first days, but I’ve got one other question.
Andrew: A lot of other founders who I interview say to me that they had lots of ideas for what they wanted to include in the first version, and it was almost an internal wrestling match to keep out features so that they could launch something already . . .
Andrew: . . . and launch something manageable. It doesn’t seem to me like you had that wrestling match. Did you? Were there features . . . No. You’re shaking your head no.
Chad: Yeah. No, not really. Again, I’m a believer on starting small and adding features later. So once it works, once I see it work. I really don’t believe it’s the features – and this is even before getting into this business – but I don’t feel like it was the . . . like I was missing a couple features that would have really [snaps fingers] made this thing sell. For me it was, “Let me get the marketing right, let me create somewhat of a buzz, let me see if this actually works and I can always add features later.” And that was kind of my understanding going into it.
Andrew: OK. So, you said earlier that you started to add other iPhone apps. You saw one worked well, it was pretty inexpensive; you learned a lot from it. “Let’s knock out a whole bunch and start increasing my revenues.” What were some of those apps that you launched?
Chad: Yeah, so I launched, right after that I believe it was Alarm Security, so I went on to [??] Fingerprint. It was just literally an app where, you know [??] if you moved it, if you did anything, it would start off alarms. So it had a dog barking, machine guns, stuff like that. So I . . .
Andrew: You move the iPhone and suddenly alarms go off – one of many different kinds of alarms.
Chad: Exactly. Exactly. And so for me, security was working. Right? So I had a certain demographic. And so I really wanted to stay in that direction and that demographic because I thought it was important versus going off and building something completely different than I knew was working. And so I really did a bunch of security apps, knowing that, “OK, I can have the same demographic, I know what this customer thinks, and if I can get some data on one of these apps from this customer then, you know, more or less I can use it for this other app as well.”
The one thing I didn’t realize is the marketing component, how strong it was, so a few of these apps that I did, they weren’t doing as well. And I was, you know, thinking that I had the solution to everything and it took a little bit of work to figure out, “OK, how am I going to make this look? Why is this not working?” You know, and that’s where I kind of got my mental muscle to figure out how to go forward in this business.
Andrew: Why, well before I say “Why wasn’t it working,” I wonder how did you know it wasn’t working? Was it because sales overall were going down or sales . . .
Andrew: . . . per product. It was. Overall sales were going down?
Chad: Yep. Yep.
Andrew: Even though you were adding apps?
Chad: Yeah, well I started adding the apps and started getting away from one of the apps that was working so this is another huge lesson. You think an app works and you don’t have to present at all on it and you walk away and you put all your attention on something else. So that’s what I did and so I watched this app start to go down and I focused on this other app and this app didn’t do well either. So as a whole income was going down.
Andrew: I see. And when it was time to go back and work on the apps you already had built did you stop building new apps or were you still building new apps at the same time?
Chad: No, I had about five ideas so it was the process of I kept on giving them ideas and getting quotes and trying to figure out how much this is going to be, and try to figure out what I could do differently. But a lot of my stuff was forgetting about the apps that were working, which I learned, it was a valuable lesson in trying to figure out how to get more vehicles making money, just like this one was.
Andrew: All right. In a moment I’m going to ask about what you did to fix it, but I’ve got to first ask about how you even came up with those ideas. You see, when you talk to most entrepreneurs about how to come up with business ideas or product ideas they’ll tell you, “Talk to customers, look for their pain, and help solve their pain.” Well, with gimmicky apps like this that are novel, that are designed to get people’s attention and make it fun for them to share the apps, you’re not looking for a pain. There’s nobody who said, “Hey, I’ve got to trick my mother into thinking that my iPhone app will actually read my fingerprints, but there’s no app out there and if some researcher will finally come and talk to me I’ll tell them why they need to build this.” It wasn’t like that and here you were cranking out idea after idea after idea that are fun, that are clever, how do you do it?
Chad: Yeah. For me I spent a lot of time in market so I realized just from being an entrepreneur that the market really dictates the apps. So instead of coming up with all these ideas outside of the box I spent a lot of time asking, “Okay, what is working? What’s working in the market right? How can I use that to my ability to actually put something out there that’s even better?”
Andrew: Can you give me an example? How did you research the market and what product came out of that?
Chad: Yeah. Early on I developed just a system for myself and again, I wasn’t very mobile so I was sitting in a chair not moving for a month so I spent a lot of time just going on the app store and learning about it. So I would look at the top 100 apps. I started downloading some of these apps. I started getting familiar with them, not just as a business guy looking to emulate them, but also as a consumer, as a customer. I’d try them out and I’d figure out, “Okay, there’s a reason why this is working. There’s a reason why this person likes this, what is it? How can I actually track this and figure out some of these common traits where I can emulate? Also if I pick ten apps and I list a certain number traits and they’re synonymous with each other than that gives me some nuggets of information that I could also take into my own business.” So I kept doing that and I do that to this day. I haven’t stopped that.
Andrew: So what did you see? Give me a specific example of what you saw as you were looking for commonalities.
Chad: Yeah, I saw that a lot of these apps were simple. I saw a lot of these apps used the interactive ability of the phone. I mean Angry Birds is beautiful example where you just use the physics and it’s not complicated. It shouldn’t be over complicated, it should be very simple. You shouldn’t have to read all these directions. You should be able to pick it up immediately, play, have fun, it should light up that dopamine in the brain and then you can go on with your business.
So those are a lot of the common — in the beginning – and it has to be something that looks kind of cool. Because, again, in the beginning a lot of these were kids where you didn’t have, like my grandparents thought of calling the other day, you didn’t have that at the beginning. So I really saw these games that kids like and it had something different, something cool, and something that they could kind of brag about with their friends.
Andrew: Okay, so what idea came out of that observation? Can you give me an example of something else that you came up with after the first two apps that you just described?
Chad: Yeah, so let’s see, there’s four that are apps. So I came up with a couple of security apps. I came up with a couple of wall paper apps. Again, in the beginning it was people that could show off their phone and they could have their phone and they could look at the thing, so these wallpaper apps are very simple. They could just flick through them. You could pick out a picture that you like and really customize. So all these things that I’m saying, it hasn’t changed. I don’t think it ever will change. All of the apps, a lot of these same types of traits are still in the top 100 to this day.
So I think I developed about seven or eight wallpaper apps. I started going into different demographics and say, “Okay, how do they like these?” Because again, once you have the framework built, once I had this wallpaper app framework, now I just had to go get the content. So I just went to get the content and would change the name. That was another big learning lesson for me, once you have a framework on something you can really start to build out some of these apps and not incur so much cost.
Andrew: Why seven different wallpaper apps? Why not one that has all of them?
Chad: Well, again it was testing. So, for me, I didn’t want to spend all this time on one round. I did wedding photos for brides. I thought, hey, I’ll try it out. I’ll try out this demographic. Instead of buying 500 pictures and resizing them and getting the app, I said, hey, let me try 50. Let me see if people like this or what do they like about it. My theory there was, let me optimize this app and figure out if it works, and then I can always scale up. Right? And then maybe I can come up with something else, that I can demographic and pass them on to my other app. But, I didn’t want to spend too much time on one time. I’d rather fire seven, and see that three work, than build those out.
Andrew: I see, so maybe where one person might say, I’m going to create a wallpaper app and include all these different categories in it and really blow people’s minds by how many different categories there are in the this thing. You said no, I’m going to niche it out. I’ll come up with seven different apps and see if maybe there’s one target audience that really identifies with this and build that one out. Also, it will help me tell my potential customers, hey, this one’s really meant for you. If you’re about to get married, this wallpaper app is meant for you.
Andrew: OK. I understand that now. I also understand that you weren’t the first person to come up with a wallpaper app, no. So, part of what I’m seeing, that you do to, is you’re going through and saying, what can I do similarly, but bring my own personality into it, or my own business analysis into it. Maybe you saw someone else come up with wallpaper apps, and you said, I’m going to niche it out. I think I could come up with a different way to do it.
Andrew: So, it’s not all brand new ideas. And the other thing, the security apps, you saw that one security app worked for you, and you said, I think I could do others like this.
A: OK. You’re nodding. So far, all this sounds terrific to me. I can see how you get better and better every time you hire new people to create your apps for you and you learn from the customers. But, you’re saying that sales didn’t grow at one point. In fact, they went down, and you went back in and you fixed them somehow. Tell me what you fixed.
Chad: OK. So, a couple things. One thing, I started realizing that a lot of the key words weren’t working. So, I went in there to try different key words. Again, I didn’t really know anybody in this industry, starting out. So, I was really calling and trying to figure out other developers that were successful, that had some knowledge that I didn’t have. [TD]. I started changing key words and measuring those. I started changing graphic stuff.
Andrew: Graphic stuff.
Chad: I talked to a friend of mine. I said, what do you think I can do? Are there certain colors that react differently with the back of the brain? Where, I look at it and I feel warmer. We all know this if we’re in sales, that they are certain colors that light up different emotions. So, I
started taking the exact same app and doing it in purple and green, or doing it in green and red, just trying different colors to see how they’d react. And, that started working. We came up with one called phone security, which was a free version. That one was blue and red. That app became a number one app, overall. So, that’s when free apps started becoming popular. So, I was figuring out, maybe I can get them to try this app. I can do a free app, and I can promote my paid app inside of that free app. The colors works, that blue, they loved it. Then I started funneling a lot of that traffic into my paid traffic and creating, really, a big community of users.
Andrew: A past interviewee who was doing really well with iPhone apps said, that if he puts his competitor’s names into the description of his app, whenever people look for his competitors, his app will at least show up and he has a chance of winning their business. So, he’ll say, “unlike”, and then he’ll list his competitors apps, we also have these other great things.
Andrew: Again, that helps. You’re nodding. Has this worked for you, too?
Chad: Yes, I did that in the beginning, and it worked really, really well. I don’t think it works anymore. I think, probably about a year ago, that stopped working.
Andrew: What does work now then, if not that? Tell me another clever little tip like this that I can keep remembering and using in other interviews.
Chad: OK. One thing is figuring out the names, the name of your actual application is super important. What has the highest yielding key words? A lot of people don’t realize that. It based on what they’re searching for. So, if they’re searching for a flashlight app, you want to make sure that your name doesn’t start with, ultra-bright flashlight app. The first word, actually, in that title, “flashlight – ultrabright”, the first word holds more weight than if it was three words down.
Andrew: I see. You’re constantly experimenting with this stuff. Of course, by the time someone listens to this, maybe a year from now, a lot of the big ideas apply, but the simpler tactics don’t. The big idea is just keep testing and trying different things and see what works.
Chad: Constantly keep testing.
Andrew: Keep looking at your stats to see what grows. How helpful were the stats that you were getting back?
Chad: Very helpful. The one thing also is to set a certain time. So for us, it usually was a week or two weeks, usually you can see if that key word has anything changed or not. So I probably changed the title, I don’t know, every month, a couple of times. Still to this day I’m still in it. It will go down or it will go up and then I’ll know, OK, for a few months this is working.
The other thing too is, you go to a doctor, they give you four different pills, you have no idea what’s going on. You might get better but which pill option worked, which pill makes you worse. So I think it’s very true with the ad business, or really any business. If you’re going to change something, just change that thing so you can measure it properly. Get your results, have some objective data, try the next thing.
One thing I learned is putting it in a spreadsheet. And you can start to see trends, and notice those trends. Maybe one will work after six months you’ve crossed it out and go on to the next one, but then you can even go back and say OK, this worked a year ago, or three months ago, or four months ago, what else could work if this works. And put things in a big white board, I love looking at things like that and getting a kind of big picture for what you’re creating.
Andrew: Chad, here is something else I noticed about your app. You do a great job at cross promoting apps, within the app itself. Tell me how you do that.
Chad: So when I moved to San Francisco, for me, I was losing traffic and revenue immediately. And I ended up meeting another developer, and he had some traffic. We started talking and figured out a way to cross promote each other, put each other inside of our apps, where we would have a unique way of getting the user. So maybe it’s the information. For mine, I found out a lot of people in the beginning were leaving me bad rating because they didn’t know how the thing worked. They actually thought it was a real fingerprint, and they would go on there and it wouldn’t work, and they would be upset.
So I said OK, I have to somehow give them instructions on how this thing is going to work. So they get inside the app, it says Instructions, or Best Use, they click on that. And then right off the bat you have four fingerprints. And one of them is this cross promotion page. Where they could see other developers, and so I had, his name is Allen, and I had his apps inside of there, and he did the same thing for me.
So if I was doing 15 thousand downloads a day, he’s doing 15 thousand downloads a day, I just increased dramatically the visibility of my apps. That definitely saved my business, really all of it combined. So I took that idea and I said, OK, who else can I get in this thing. And I contacted Lima Sky, who did doodle, and I said hey this is what we’re doing and it’s working. Would you guys be interested in it?
And he said, yeah, let’s do this. So I got Lima Sky in there, which was 50 thousand downloads, and I said who else can I get in here. I got three more people, and we created this little mastermind group, and we pushed and shared traffic. I still do it to this day, it’s huge, huge nugget that works for us, when everything is failing, that always worked because these people always had traffic, of millions of customers.
Andrew: OK, Alright. That’s what I was getting at.
Chad: Like little JVs.
Andrew: Alright. Cross promotion, key word, SCO, I’m making sure that everything I promised people would hear, that we actually go into it. At some point, you said these apps are great, this company, which is Empire Apps, which I just described earlier, is doing great. But you seem to have launched other companies too.
Andrew: What was the first company that you launched, after Empire Apps, which we’ve just talked about?
Chad: So what happened was, about a year later, one of my best friends, the guy that came into the hospital and told me about how to get into the business. He also had his own company, and we started working together and saying hey, let’s do something together, let’s start another company. Empire was working really, really well. We said hey why don’t we keep doing this, we can create these systems and these other companies, and we can sell off these companies.
We’ve got something that works, we have something that isn’t going away. Let’s do this, and so we started T3 Apps, and incorporated the same information, the same knowledge that we learned from Empire, and put it in there. And in about four or five months it was doing close to $80 thousand a month, that same exact system. So we did that and we started another company and did that as well.
Andrew: T3 launched 2009. My understanding is it was first called Tap That App. Am I right?
Chad: It was, yeah. You do your homework.
Andrew: As in tap that. That’s a cool name. T3 is also a website where people can find other apps, like an online directory? Right?
Chad: Yeah, that can go on there and we started doing that. For the most part we were trying to create a community more than anything. More or less just a network of app companies than that functionality. But yeah, that is part of it.
Andrew: That’s a little different from what you were doing up until then. With Empire Apps it was just straight up apps, cross promotion. You talked about how you started offering it for a price, then you started offering it for free with a link to the app that cost money. You started to tell us about how you included advertising in there. Maybe we’ll get to advertising in a little bit. I’ll put a note down to come back to that. It was all within the app store. With Tap That App, I’m going to keep using that name because I like it, or T3, which is the current name, you said we’re going to have a web strategy too and you’re telling me now it is to create a community. What do you mean by that?
Chad: It was really just to get other developers involved. Basically. We didn’t go too much further into it. It was really just to create a bigger network because, you know, I had worked with cross promoting with four or five developers. What if we could create 20 developers, 50 developers and really figure out a system on how to leverage traffic.
Andrew: What was your vision for leveraging traffic through the website? I understand the vision for leveraging traffic within the apps. You open up one of your partners apps and there’s a link to your app in there which means potentially someone is going to come and download your app through a partner’s app. That makes sense to me. The web strategy I don’t understand.
Chad: Similar to, I don’t know if you’re familiar with Free App a Day. They have a lot of apps where they constantly broadcast. They have a network where they have a Facebook fan page and stuff like that. That was the idea behind it. The reason it wasn’t built out is just because we started doing so well with other companies. Then we started selling them off, so how much do you really want to dilute what’s working?
Now we’re selling off everything and jumping into that space aggressively. In the beginning it was more OK, this is working. We want to do this, let’s kind of plant our feelers out here. Let’s focus on what’s working, what’s bringing us the most amount of money.
Andrew: I see. Right. Why go into a web strategy if the mobile strategy is doing so well? Why get distracted? I get it.
Let’s talk a little bit about ads now. I understand why you came up with the free version and how you were going to monetize it by leading people to the paid version. At what point did you realize hey, I could make money by putting ads in the free version? How did that go for you? Take me through the learning experience regarding advertising.
Chad: OK. A couple of things. I had a couple of developer friends who were trying using ads and they loved it. They said this is bringing much more money. For me, at the beginning, I was kind of hesitant to put it in there because I didn’t want to ruin the user’s experience. In my mind, my model of the world, was it’s going to annoy people. They’re going to see ads, it’s going to annoy them. I’m not going to get them because it’s five to seven times harder [??] customer so I want to keep a customer that’s going to keep coming back and buy my other apps. Versus just having somebody buy the app and then leave me.
It took me a while. It took me six or seven months before anything was happening. Before I decided to even integrate ads inside of the apps. I lost out on a lot of revenue there. Then just like anything I said let me test out. Let me see if reviews change, people hate this. We tried i-ads. When i-ads came out with Apple. That gave me confidence because it was Apple. They pay with everything else. The ads look really, really nice.
We started doing that. We had so much traffic going that immediately it added a couple of hundred dollars a day to the portfolio. That was exciting. That was like OK, this is working. The users aren’t getting upset. People are really aware of ads now. It’s just normal. Nothing that really takes away. If you’re going to the airport, if you’re doing anything ads are constantly barraging us. I-ads was great. Then we started going into looking at other ad platforms to jump in there when i-ads weren’t serving. That increased revenue even more.
Andrew: Oh, I see. Not serving because they hit a limit with your app and hit a limit with your audience. Are those both two limits?
Chad: Yeah, so what happens is typically when someone opens up the app they grab an ad from their server. It typically will populate probably three out of ten, three or four out of ten times. And so there is a huge discrepancy where users aren’t saying anything. And so, actually, Tayfun found AdWhirl, and he found a couple other companies that were able to throw into AdWhirl. All AdWhirl does, if it grabs the first i-ad and it’s not available, it’ll grab another ad network.
Andrew: I see.
Chad: Maybe it’s AdMob, Google; it puts that in there. If Google doesn’t work, let’s grab Millennium and so theoretically, you’re going after a hundred percent fill-rate.
Andrew: You’re bringing up names of partners. Why bring partners at all? You invested the original $1850 in developer costs. You invested the original money, you figured this stuff out yourself, you had a network that you can use to create other networks and other businesses. Why bring on a partner?
Chad: The thing about Tayfun is he’s really, really good at what he does. He has a computer science background.
Chad: He was the guy that came in the hospital and said, hey, you should do this. He read this story about iFart and he really pushed me to get involved from the beginning. We both had our own companies; I had certain strengths were I was creating things and coming up with ideas. Where I was getting stuck, and I was making great money, but where I was getting stuck was a lot of the implementations. I didn’t have like a project manager that could communicate on a big scale with some of these developers.
We both kind of recognized that, so when we came together a year or so afterward and developed and started working on these other companies together, it really alleviated a lot of the holders that kept me from growing– from scaling into business on a big scale. I mean, could I have tried to hire somebody? Yes, but I don’t think they would have been as effective as him and I trusted him and his ability. So that’s when the other companies released it, we just took off running because we had everything together. We just took off running, versus trying to get through all the qualms of growing a business.
Andrew: So kind of like the way somebody might be listening to this interview right now and saying, hey, Chad did really well with iPhone apps; I’m going to go do it, that’s how you got your start? You saw someone’s success story with the iFart app and you said, I think I can do something like this, too.
Andrew: So a lot of people are also listening to us and getting these tactics from you that they can go implement, and bigger ideas that they can use to create their own tactics. Where did you learn these tactics? What source do you go to to learn what people are now turning to you to learn?
Chad: Great question. In the beginning, I fell on my face a lot. I learned very quickly, when you fall on your face you have to figure out a way to stand back up. Really, I started reading a lot of blogs, just connecting these developers. You’ll see taptaptap, they’re very successful; the guy’s always talking about what he’s doing. Joel, also, from iFart, he was constantly writing about success stuff. So there is a lot of information on there, and a lot of information from successful developers and from not-so-successful developers. So it’s important, obviously, to look at the successful developers.
For me, I’m a big networker. So I want to go to a conference, I want to go to any type of event that I know there’s going to be information that can help me; I can soak it in, assimilate it. That’s what I did in the beginning. When I went to San Francisco, I really met up with some really cool people and started creating a mastermind. Because I know that they’re going to try eight or ten different things, I’m going to try eight or ten different things. Instead of falling on our face, I say, hey guys, let’s talk. What can we do together? What did you learn? Just like anything, that knowledge is a more efficient way of growing.
Andrew: How formal was the mastermind?
Chad: We talked every week. We would meet probably every two weeks. We had, I started out with just Alan and his partner, which was two other people, and then we grew to probably six or eight people. We had 15 at one point. You really see, too, how much dedication people have. Some people, they won’t respond; they’re doing their own thing. But some people really just want to keep growing and working together.
Andrew: I see, so you’re putting these events together, not events, these little get-togethers. You’re putting them on, and some people would show up consistently because they were hungry for information and eager to share something with you because they knew that then, you’d tell them what was working for you. Other people thought they were in the space, but really weren’t even willing to put the time in to figure out what you were doing.
Andrew: I see. You said you fell on your face a lot of times. I’m looking at my notes here, and of course, I’ve got a person here who does research on you…like the CIA almost. We’re going to get as good as the CIA; eventually the CIA will come to us for research skills. I don’t see any fall-on-my-face stories here. I don’t see any examples of it. Maybe we need to get better at the research. Maybe you can just tell us right here. What did we miss? Give me the biggest failure.
Chad: There were some apps that I did, collectively I’ve done well but there’s some apps that I’ve done that haven’t hit at all and some lessons I’ve learned. For me, falling on my face is I try four or five different things and I spend $5,000, $6,000, $7,000 and I don’t make that money back. But I don’t stop and I keep learning and integrating what I’ve learned. Eventually that app that I just lost $7,000 for, I might make some money back on it. Yeah, there are some apps that I did. I even submitted an app to Apple that got rejected. I never salvaged that app. That was probably $4,000 or $5,000.
Andrew: I feel like persistence is undervalued right now. There’s a sense of I just tried something and hit it out of the park and money just flowed in or investors poured in cash and then I took it public and so on. You were persistent anyway. Why? Why not just at some point say ah, this thing isn’t really working for me. I did really well. I’m getting the hell out of here. The apps did well. In my mind, I’m seeing a lot of people in the early story that you went through, experiencing a big hit, seeing that the app revenue is going down and saying why should I keep at this thing? Obviously this was a gimmick that played itself out, I’m going to go back and get a job or I’m going to go and try something different. Or maybe I just don’t have it or maybe I have it and I’ll do something else. Why were you persistent in a situation like that?
Chad: For me it was really, I tasted financial freedom. I’ve been an entrepreneur since I was 16 and I’ve worked my butt off and owned a bunch of different companies. It’s great to be an entrepreneur but why do we do it? We do it for the lifestyle. We do it because we can be present with our lives and grow and do some cool things. This was the first time in my life that it actually became true. Where I wasn’t the owner that was managing all these things, stressed out, and running around and really not present with what was going on with me. Once I tasted that just a little bit and I saw what was possible, I was not going to let that go. I would have done anything. That’s what’s exciting.
The other thing I realized too is when you really put your head down, I’ve always kind of put my head down and made things happen, but once I got a little taste of what this could do and I could travel and wake up and look at my stats it got exciting. It was something that was fun. I think that’s the other thing, I really enjoy it. It’s fun looking at these things and playing with it. It’s not a boring thing, it’s not like real estate. It’s something that you can really enjoy doing. It’s interacting. And it’s something that a lot of people know about and it’s growing so it’s an exciting industry as well.
You’re exactly right. A lot of people, they stop. Even after six, seven, eight times. The thing is, the information’s out there. This market is constantly putting up its hand and saying this is working. Real time, this is working, this is working, do this. I don’t know any other industry that does that.
Andrew: That is true. I don’t know that in the real estate space if something worked that somebody would come on and be as open you are or as other guests have been. As I said, Jen Gordon came on here. She didn’t just say I have a successful iPhone app, here are my stats on it. She said I’m going to show you how I did this. There aren’t a lot of spaces where people do that. I wonder what it is about this space, what it is about us, that makes us be open about numbers, information, ideas, and how we did it.
Speaking of numbers and being open. I love numbers and I always want to know how much the people I invite here do beforehand, hopefully, but if not then during the interview. Let me ask you this, the numbers I have here: app downloads over 5 million. True? Over 5 million of your apps have been downloaded?
Chad: Total of all three companies? I think 24 million, 25 million.
Andrew: Oh, so my numbers are really low. 20 to 25 million downloads of your apps. For revenue I have here, quote unquote, millions. What size revenues would the three companies have done?
Chad: How much revenue for all three companies? That’s a great question. I don’t know the exact total because we also sold them, as well. You’re saying with that selling price?
Andrew: Let’s say before the selling price. I’ll come back to why you sold in a moment.
Chad: OK. I’m not sure but definitely in the millions range. I’d have to add them up all because we are still getting paid because Link Share and other affiliate marketing stuff they’re three, four months out. We’re still getting revenue.
Andrew: Would you say $3 million to $5 million?
Chad: No, a little less than that.
Andrew: A little less than that. OK. Did you, at the end of this, including the sale, pocket over $1 million after taxes?
You’re nodding. That you can say comfortably. Why did you sell?
Chad: For me it was really there’s nothing to be scared about in this space. Meaning it can be replicated pretty easily. This skill and this system can be set up and continuing to grow. For me it’s go ahead, sell off, create it again and sell off. We sell for a lot of different companies and I am looking to continue to do that, so for me it’s, you know, how can I take it to the next level? Yes, done really very well, I blogged down those books. You know, for me it’s, I want to do something, now I have kind of mastered this component, so now what can I jump into that I don’t know so well and keep this going and do something that is a complete game changer, you know. I mean, trying to grow constantly.
Andrew: You know, one thing I have got here in my notes is that you are going to release the book in 2011. I wish the book was out now. I know that anyone who has spent about an hour with us just listening to your stories has got to be saying, ‘I want more, I want to know how he did it’. Unfortunately the book at this point is not available, but I will give everyone the name of it. It’s, actually … Why don’t you give the name and we can talk about how they can learn from you?
Chad: Yeah, it is selling right now, but they won’t get it for another, probably about a month. So it’s on Amazon right now.
Andrew: Ah, so they can do preorder now and maybe…
Andrew: Got it, got it, OK. Great.
Chad: Exactly, it’s, ‘How to make millions with Apps.’ It’s pretty straight forward…
Andrew: Simple steps to turn your idea into Apps success.
Chad: Yeah, and so I have really broken it down because for me again because I wasn’t this computer junkie, technical guy. And so a lot of these steps on how it became successful are very simple because they had to be. All right, and I have really chunked it down, so anybody can pick it up and if they have an idea they can figure out pretty quickly, is this is an idea that is feasible. Will it work? And, you know, how can I take this business and this lifestyle to the next level and for me that’s what it has done. Being able to travel around the world and live, you know, live like a king and really enjoy life for the first time. So that’s what my whole book, for this book is, is to get that into public, get more people doing that.
Andrew: You have already written the book, right? The publisher has it?
Chad: Yes, yeah.
Andrew: Can we say this, I should have asked you this beforehand because I am just so grateful to you for doing so, for giving so much in this interview. People who watch my interviews have now done over five hundred, almost six hundred interviews, know that there are some people who bring it, and other people who sit back and expect me to just kind of promote the fact that they did well in life and sit here and just applaud for an hour. So I want to find a way to do, to just show my appreciation. Can we say that if people, maybe buy the book now and email you a receipt to it to say, ‘Hey, I brought the book’, that you can send them the first chapter or something to say, to show your appreciation [??]…
Chad: Yes, I can do that, definitely.
Andrew: I don’t know how many people will take advantage of it, but guys, you see when some guest actually has the knowledge, has the experience to backup that knowledge and the advice and is willing to share it, and I think that it’s rare. God knows, I have sat here through some painful experiences with people who don’t have that.
Grab the book, ‘How to make millions with Apps’, or we will link it up in the interview notes so that you can go out there and get it, and how do they email you, how do they contact you and say, ‘first of all thank you for doing this interview.’ Apart from whether you buy the book, I hope you email Chad and say, ‘Thank you’, for this because you just spent an hour with him. But maybe they send you a receipt, and get a book chapter. How do they do that?
Chad: Just go to chadmureta.com, chadmureta.com. And they can just put in their information there, and send me the receipt, and I will get that to them as soon as possible…
Andrew: Cool. It would be nice.
Chad: … that first chapter. I will give them also this seven pillars checklist, so that they can start figuring out even before their business, what are the main things that they can concentrate on.
Andrew: I really hope people do that. I want my audience not to be on the sidelines of life, not to just watch, you know, like, to sit back and watch me on their Apple, TV, or whatever device they have hooked up in their homes. People have these crazy devices from what I am hearing but just, like, jump into life, if you hear someone whose story is interesting send him a note and say, ‘Hey, I like your story.’ Maybe there is no connection, no business that they can do with you today, but who knows, five years from now something could come up, and to invest that little time to say, ‘Hey I am touching in with you today’, will make that introduction five years from now so much better. To say instead, ‘Hey Chad, I think you should do business with me’, is kind of awkward, but five years from now, to say, ‘Hey Chad, I am the one who sent you an email after that great Mixergy interview …
Andrew: … and I think we can talk right now’, that’s much more powerful.
Chad: [??]. And that’s what [??] you do, which is brilliant. You know, you have decided that, [??] takes that knowledge back and change the life. Because it is, it’s right there and that’s why I really appreciate what you do because…
Chad: … I have had a lot of people aren’t, a lot of people just go after it for different reasons, and you do want to give back, and I respect that. So…
Andrew: Thanks, I appreciate that. I appreciate it, I appreciate you doing the interview. Two pieces of information, first of all I got to thank Dane Maxwell who did an interview here before…
Andrew: … who said, ‘I have got this guy.’ He texted me and he said, ‘You got to meet Chad.’ Dane, thanks for making this happen.
Andrew: And second if anyone wants to see these courses I have been talking about. I know I don’t promote them enough. So I am going to say it right now, mixergy.com/premium. You can see all the courses including the one that we are about to put up on, about iPhone Apps. Chad, you know what, look at the excitement that I get. When I get a good guest here, of course it changes me, you know, I have got to believe that part of the reason why TV interviews are good is because they have good guests all the time, you know, someone screening the bad ones out. When I have a good guest like this, I get excited. This feels like a fun job and so I am grateful to you for that.
Chad: Thank you, Andrew.
Andrew: Right, thank you all for watching and let me do this fun stuff. Bye, go use it.