appbackr is a revolutionary new service set to change the face of mobile application sales. Rather than going down the traditional, slow and risky route of publishing their application straight to the App Store, iPhone developers have the chance to sell their products ‘wholesale’ instead. Prospective investors (or ‘backrs’) purchase the application in bulk and make a profit by reselling it to consumers, while the developers almost instantly make money from their software.
The whole idea was conceived by Trevor Cornwell, the brain behind the business jet reservation network SkyJet and current CEO of appbackr. In anticipation of the launch of the appbackr project tomorrow (you can view the press release here), he has kindly agreed to answer a few of our questions.
Mr Cornwell, thank you very much for devoting some of your time to talking with us about your new project, appbackr.
First of all, what led you to conceive appbackr?
Developers face problems of time, money and distribution. I have been an entrepreneur for many years and the lag between the conception of a great idea and the posession of the resources needed to move forward on it is to slow. I read a Seth Godin column and he said, in so many words, don’t fund the business – fund the project. That really nailed it for me. Rather than trying to spend months or even years to get equity financing, developers – especially app developers – need financing that moves as fast as they do. We are living in a new Renaissance period of creative innovation and funding from traditional models can’t keep up. So I knew the problem and had a rough sketch of the solution and then at PayPal X’s Innovate Conference, PayPal released an API that allowed you to distribute money to multiple parties seamlessly. I deconstructed the $0.99 app and saw that I could provide a developer with immediate payment; and a backr with a 50%-or-more profit. And I said, “I think I have something here”.
Were the problems it solves for developers the same as those you encountered when you were trying to get your products noticed?
Developers face the same problems that all entrepreneurs face. Despite the myth, great ideas usually don’t just get discovered. They are smartly worked on behind the scenes but look as though they have just popped up into our imagination. By having backrs, developers have a team working for them. It also shifts the timing so that rather than waiting for an end retail customer to fork over $0.99 for an app, the developer gets paid right away. This allows the developer to do things immediately, such as marketing, distribution, etc., that will increase sales of the app.
How does appbackr work exactly – will applications purchased wholesale through the service be available alongside regular applications on the App Store or will customers have to go through a specific appbackr application to access them?
We don’t touch retail, so buyers still buy through the App Store. We work in the background, getting great apps to market with the resources they need. We give developers immediate payment via backrs. and we give backrs the chance to profit and be part of generating more sales. Down the road, the wholesale model will allow more creative retail solutions to flourish. We are the missing piece in the puzzle.
And will ‘backrs’ run out of stock when they have sold all that they originally purchased?
So apps on the retail market never run out of stock. On the wholesale market, the purchases made correlate with the inventory on the retail store. So if I buy the first 10,000 wholesale copies on appbackr, after those 10,000 copies sell on the App Store the backr can either buy more wholesale copies or just count his money and go on and buy another app.
Whom do you see being the target demographic for using the system, on both sides of the market?
20% of the app market are what Flurry call “Native Developers”. This is the market of developers who are building exclusively for the App Store. We see those developers as being our target market. There is potential for other developers to use appbackr, but that is our first and primary market.
You have already stated that after initial availability for the iOS platform, the Android operating system will also be supported. Are you interested in further expanding support to provide for platforms such as Windows Phone 7, Symbian or BlackBerry OS?
Yes, we are trying to keep up because we are getting so many requests for other markets like Android and Blackberry and Windows Phone 7. It turns out that manufacturers and carriers are interested in our model because we help bring a disproportionate share of apps to their markets. If developers know that they can create great apps and get paid, they are willing to look at other markets than Apple. We help in that equation.
Finally, where do you see appbackr heading in the next few years? Selling applications ‘wholesale’ is still relatively unheard of – do you hope to break into markets other than the mobile world with a similar concept?
‘Wholesale’ is a new word for this market but it is as old as commerce. We think that this model works for books and music. Record labels are in retreat. Book publishers are being challenged by digital self-publishing. We replace the individual wholesaler with Crowd Funding, which creates a financial motive to sell products more efficiently and at the same time broadens the eco-system to everyone’s benefit.
If you would like to see appbackr for yourself, visit the project’s website.
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