July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

“We’re all about customer experience and enriching lives,” Apple CEO Tim Cook told Wall Street a couple of months ago.

That’s occasionally a little difficult to believe.

There’s no question that Apple is among the more customer-focused companies in the computing and technology industry. But there’s also no question that the company has a history of moves that can be tough pills for its fans to swallow.

One case in point is the iAd WorkBench/AppGratis scenario that has played out over the past few months.

This past week Apple unveiled iAd Workbench, a new mobile app advertising solution for companies that want to promote their iOS apps.  Just in April Apple pulled AppGratis, a very successful app discovery app, from the iOS app store — just five days after approving it – and then, after having had significant discussions with AppGratis over previous weeks as the company had adjusted its app according to Apple’s concerns, Apple refused to speak to AppGratis again.

Coincidence? I doubt it.

AppGratis was a free-app-of-the-day-style app that developers paid for access to in order to drive downloads of their iOS games and apps. Only iPhone owners who wanted the app downloaded it, so it was a self-selected audience, and the company was selective about who it featured. By late 2012, AppGratis was getting big enough to be able to drive upward of 500,000, and in some cases 1,000,000, downloads in just days — big enough to drive apps straight to the app store leaderboard.

Apple’s new iAd Workbench is an advertising solution for app developers. App developers who want to increase their downloads will buy ads that will be placed onto other apps, ones that users have already downloaded, and they can pay Apple per install of their app. iAds has come from rich interactive ads for 7-figure contracts with massive global brands to $50 minimum buy-ins to flog your apps.

What’s the key difference?

In scenario one, you paid AppGratis to drive downloads of your app. In scenario two, you pay Apple.

There’s other differences, and there are some nuances, sure. But that’s the core difference.

Apple was concerned about developers using AppGratis to “game” the app store top-10 ratings as well as alleging that AppGratis broke the app store guidelines. I fail to see how iAd Workbench couldn’t be used in a similar way, or how ads in any other online or mobile locations couldn’t do the same thing. And it is very clear that there are multiple other mobile app discovery solutions and ad companies who are doing the exact same thing.

I also fail to see how Apple couldn’t have devised a method of tracking downloads from AppGratis — or any other app discovery app — and adjusting the app store leaderboard to more heavily favor “organic” downloads. I wonder if something like that will be built for iAd Workbench, or if a massive spend on iAd Workbench will drive your app right up into the upper echelon of app store stardom.

Source: Apple

iAd Workbench app advertising solution from Apple

I talked to AppGratis CEO Simon Dawlat recently, but he doesn’t want to comment publicly. The company has been burned enough by the press, and by Apple’s reaction to it. But it’s pretty clear that success almost killed his iOS business. That — and the fact that Apple wasn’t “getting a piece.”

Which is why AppGratis is now on Android, where Google doesn’t exercise such heavy-handed control. And why, for iOS, it’s now focusing on the web, which Apple can’t control.

Which is an important point for Apple to remember.

While Apple was first to build a successful and massive mobile ecosystem with devices and apps and media, it’s not the only game in town anymore. It is the most lucrative in town, paying $10 billion to developers over the last five years, including a staggering $5 billion just in the last year. But sometimes platform owners have to do what’s good for the platform, and for third-party developers who are on the platform, not just what’s good for them.

The risk, if they don’t, is that at some point they’ll no longer have a platform.

Image credit: Nathan Makan/Flickr

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Can you buy your way to the top of the app store? In a word, yes.

Apple may have killed AppGratis for being too good at driving installs, but the “boost effect” of big marketing campaigns, in-app promotions in popular apps, and other somewhat less savory means of driving big download numbers is still very much alive and kicking.

To get top 10 in the U.S., you need 80,000 downloads, mostly in the previous 24 hours. Once you’re there, of course, Apple’s own “app discovery” effect kicks in as users see you featured on the front page of the app store … and you tend to stay there.

Mobile app marketing company TradeMob — the largest app marketing platform in the world — says it works with 80 different app discovery partners. Most of them say that AppGratis just became too big for its britches (or Apple’s) and was culled simply for that reason. And most of them are still providing free or discounted apps, with 60 percent of them feeling “perfectly safe” that their app will not be deleted.

So based on 72 “boost” campaigns, TradeMob calculated the number of downloads required to hit the top 10 lists for some of the key iPhone markets … and the cost required to make that happen.

It turns out that those 80,000 downloads cost you $96,000 in the U.S. for a non-game app — an average price of $1.20 per download. That’s actually cheaper than it would be if you had to buy them all, due to “organic uplift” that helps you generate more downloads as people start using your app, and tweeting, sharing, and talking about your app.

It’s cheaper for games.

While non-game apps have a 65 percent uplift, game apps get a full 100 percent organic boost, according to TradeMob. That means that for every game app you pay, incentivize, or advertise to get a download, another one happens “for free.” So those 80,000 installs cost you only an average price of $0.70, for a total of $56,000.

Other countries are cheaper, of course.

The UK requires only 26,000 installs to hit the top charts; Germany, 15,000, and Spain, a mere 7,000. But, of course, the financial benefits of having a top 10 app in those countries is significantly less as well.

Here’s all the data, in visual form:

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

In the good old days, Apple’s app store had a few thousand apps, and you could probably browse all of them to find what you wanted.

That lasted about 30 seconds.

Today, the iOS app store has probably 775,000 apps. It’ll hit a million in June or so, right behind Google Play. And while Apple is celebrating 50 billion apps sold, the increasingly huge skeleton in the closet is Apple provides just 23 categories to sort those million apps, plus another 20 subcategories solely in the games section.

Source: John Koetsier

App store categories – iOS

Worse, the front page of the app store is a Pareto principle on steroids, with apps in just four mega-categories: New, What’s Hot, Paid, and Free.

Tap the All button in any of them, and you’ll get about six screens full of apps to scroll through — a measly pittance compared to the wealth waiting in those hidden hundreds of thousands of apps. And with Apple on the warpath over the past few months, deleting app-discovery apps from the app store in the wake of its own purchase of Chomp — an app-discovery engine — and forcing app discovery onto the web or into other small niches, it’s tough to find anything beyond the big hitlist of the top apps from the big publishers.

“The Apple App Store, with a mere 23 categories, is nearly impossible to navigate,” Edwin Cooper, the CEO of app discovery site OttoCat, said in a statement.

That’s is probably why Google Play’s top 10 lists are more diverse than Apple’s, with more indies hitting the big time.

Enter OttoCat to the rescue.

OttoCat does exactly what the named suggests: Break Apple’s million apps into easily navigated nested categories. They’re automatically generated via a scraped list of iOS apps from Apple’s public web-accessible app previews. And they’re much more helpful, exploding the very generic “Utilities” into subcategories such as “Calculators,” “Security,” “Remote Control” and “Servers.” And then even more subcategories, further breaking down “Remote Control” into “Windows,” “Media Center,” “Appliances,” “Wi-Fi Network.”

In other words, making those 775,000 apps actually browsable for the first time. And shining the light of day on apps below the top 250 or so.

“The most visible apps are the most popular apps, and so they stay most popular.  Users have no means of seeing past a few top apps into the main area of the store, where most of the merchandise is,” Cooper says. “OttoCat [gives] users an easy way to finally access the 99.5 percent of the App Store which had become frustratingly inaccessible.”

Cooper knows a little about the problem of managing huge amounts of data and making it searchable. Before founding OttoCat, he founded InQuira, a knowledge management platform for Fortune 500 clients — including Apple — that Oracle acquired in 2011.

What I really liked about the site is that OttoCat gives you a sense of how you’re narrowing down the list as you go.

For instance, I clicked on Books, which informed me that there were 35,577 apps in the category. Selecting Children’s Books reduced the number to 11,780, while Bedtime brought it down to 521. Choosing children’s books that are narrated reduced it further to 117, and selecting those that have interactivity then brought it down to just 35.

775,000 to 35, in just five steps. And now I’m at a manageable number to actually chose the book I’m interested in.

Navigating the app store this way is important for indie app developers and titles that are never going to hit the bigtime, but might be just the perfect app for any given iOS user. And it’s good for app consumers, who might want a bit more choice than they currently have.

Interestingly, it’s also similar to the way Google Play organizes apps, with categories like Books > Children’s Books  > Bedtime and Dreams. In fact, it’s more detailed than Google Play, with more factors to help you narrow down the various lists.

“In the App Store, the popular apps stay popular, because that’s all that users can get to,” OttoCat says.

OttoCat, which has the tagline “discover the app store,” is working to change that.

photo credit: Brian Wilkins via photopin cc

Disclosure: I’m an independent app developer myself, I suppose. At least, on a very part-time basis. I took a bedtime story that I told my daughter and made an app of it.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

A month after Apple infamously booted app discovery engine AppGratis from the App Store, the company has approved a new type of app discovery engine, one based on friends, celebrities, and their apps.

And this one doesn’t have the pay-to-play feature Apple really hated about AppGratis.

“We brought something new to the table,” cofounder and CEO of AppCurious Riz Nwosu told me today when I asked how his app was approved. “Instead of just taking what Apple does and making it a bit nicer, we brought a new paradigm to the app store.”

That “new paradigm” is to find and follow friends and celebrities and install new apps based on what they use and share. Nwosu calls it a “Quora for app discovery”; it has a search-and-question function that you can use to ask, for instance, Robert Scoble what he thinks the best photography apps are or investor Warren Buffet what stock apps he uses.

“I think the hoopla about app discovery apps being booted is because they didn’t think of app discovery in a creative way,” Nwosu says. “They’re just promoting apps and repurposing an app store.”

AppCurious has no sign of the feature Apple really hated about AppGratis: the capability for a developer to buy placement, get featured, and drive hundreds of thousands and sometimes millions of downloads. Instead, it’s a social Q&A network for app users that invites developers into the conversation: When someone comments on their app, developers are notified and can respond.

In a way, it’s something like the social app discovery functionality Facebook built in 2011, but in app form. Or like AppUpdate for Android, which helps you find new apps based on your friends’ apps. A similar app on the iOS app store that has also survived the Apple app-discovery witchhunt is AppGrooves, which also enables you to make socially influenced app download decisions.

The biggest difference between the new breed of app discovery apps that Apple is permitting is probably their monetization model.

AppCurious, for instance, has no plans to charge developers per install, as that is user-driven. Instead, Nwosu plans to charge users for expert recommendations — similar to Quora’s model — charge app developers for featuring their app promo videos on the AppCurious explore page, and eventually, when he reaches scale, charge developers for access to their app’s brand page inside AppCurious, so they can communicate with users, update news, and respond to comments.

Nwosu is still building an audience for AppCurious, but he’s particularly well placed to do so. Given his startup’s location in Hollywood, he sees star power as the way his app can break out of the million-strong app pack and vault into the bigtime.

“We have some connections with celebrities,” he told me. “It would be great to get Justin Bieber to get on AppCurious, for example.”

There’s on problem with that plan: Stars are getting savvy about tech companies, and several that AppCurious has approached have already asked for equity in the company, which Nwosu is reluctant to provide.

Image credits: AppCurious

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Simon Dawlat is the CEO and founder of AppGratis, whose app discovery app was pulled from the app store by Apple.

Allow me to jump right into this by saying that yes, we have created a business while solving a problem.

And that last time we checked, it was still OK to do that.

Source: AppGratis

Retraction letter

I will also use this post to clarify once and for all the delusional accusations about AppGratis allegedly running a “bot network.” These accusations came from one single person. This person went to TechCrunch. TechCrunch bought the story and published it. It started spreading. Our lawyers acted rapidly and obtained a formal and written apology letter that you can find here. As stated before, we have never done anything shady in order to grow. And we will always be able to bring proof of that.

But back to the important part: our business model. And why it is fair and rock-solid.

To understand where we come from, it’s important to remember that we started in this industry years before there actually was an app advertising market.

Back in 2008, I started coding apps with some friends in San Francisco. That was right after the App Store was released. Quickly, our apps started failing. Not because they sucked (or maybe because of that — but back in those days, any app with a cool icon was a potential hit). But because App Discovery was already a nasty problem.

After toying with different ideas, I set out to launch a daily newsletter where I would send my daily app picks to friends. AppGratis was born. On the side, I was also running an app-focused blog where I was reviewing apps on the web, so I was in contact with a lot of fellow app developers. I started reaching out to these guys, and offering to highlight their apps. In return, all they had to do was either set their app free for one day, or at a discounted price. I’d take their app, review it, write up a quirky little copy about it, and push the send button.

As for today, thorough reviews by our app-curators combined with editorial excellence remains a heavy component in the amazing App Discovery experience that AppGratis brings to the market. The only difference now is that we operate in 12 languages, and in more than 30 countries.

And this is how we helped and are still helping — for free — hundreds of indie devs with great apps to get well-deserved visibility. In the past few days, many of them have stood up for us … and many haven’t, probably in fear that Apple will stop featuring their app if they speak. I make no judgement of this. I thank the former, and fully understand what motivates (or doesn’t) the later.

We operated as a fast-growing newsletter for more than 1.5 years.

Then, in the Fall of 2010, Apple approved the very first version of AppGratis. At that point, we started growing even faster.

Over 2011, we grew AppGratis as a company from only 2 people to one with 30, all with no external funding.

In 2012, we saw our first clone appear on our radar. We accelerated global expansion while talking to potential VCs. By Q1 of 2013, we had closed our $13.5M Series A and had secured 5% marketshare in the US market. And as I said before, we’re just getting started.

So. Where’s the money coming from?

The money comes from advertisers with freemium apps.

In the Spring of 2010 — as a direct consequence of Apple introducing the In-App Purchase API a few months earlier — we started getting the first serious requests from leading industry players. Discussions went like this: “Hey guys, we have this cool app. It’s already free though. Can you feature it? We have a big budget to promote it.”

We scratched our heads.

How could we bring these cool new apps to the AppGratis community by

1. creating more value to our users
2. connecting advertisers with the right users among our core audience, and
3. making a decent living in the process?

We went back to the clients saying: “Look, your app is great, but already free – what can you add extra, that still fulfills the deal we have with our users?”

At that point, we started experimenting with offering in-app deals to our users where the client would unlock an in-app purchase for a set time, and we’d then feature it. We’d label these deals “Sponsored,” we’d enforce our internal policy to make sure that we were only working with the best advertisers, and — as people tend to forget — we’d only feature apps that Apple had approved for its App Store in the first place.

We then surveyed our community: “Folks, happy with this new type of deals?” Answer: Yes. Status: OK. Carry on, AppGratis.

Then, the whole incentivized-downloads controversy kicked in, resulting in Apple declaring that developers should not pay for guaranteed Top 25 placements. We introduced a new pricing structure based on performance. Media buyers could buy traffic with us on a “CPI” basis (which stands for “Cost-Per-Install.” This is now the industry standard). And to guide them through their complicated media buying, we’d send them — with no guarantees whatsoever — a spreadsheet that indicates the forecasts of installs we thought we’d be to able to drive for their app in each country. Since the App Store algorithm relies mostly on download velocity, it’s simple math to buy your way to the top of the charts by purchasing the numbers of installs you need combining multiple vendors. It’s the most common marketing strategy in the market today, and at the end of the day, it’s just regular advertising.

People have accused us of gaming the top. But the reality is that with or without the “rankings,” our community will still drive millions of installs for the apps we feature. Independently from the App Store. We have never based our business on ranking exposure, because we’ve always expected Apple to chime in at some point, and change that.

We have always based our business on solving the App Discovery needs that consumers have.

As entrepreneur Aziz Ali commented last week:

You have to realize that the 12 million users are willingly using AppGratis to find apps, download new apps and write their personal reviews of the apps they like. If the users HATE the promoted app, it will get more bad reviews than good ones. So in a way AppGratis is magnifying and speedifying the purification of the Apple AppStore since more and more people will discover and rate apps in the Apple AppStore faster.”

Exactly.

Some people seem to have a very moral approach to this. But at the end of the day, all we do is simplify discovery for our users. Simplify attracting new valuable users for developers. And send the App Store around 300 million visits per year.

And we also made a business in the process.

Yep.

A business.

Sue us now!

Yesterday, Business Insider accused us of gaming the system and “leaked” one of our spreadsheets under the title: “Leaked Document Shows AppGratis Used Lure Of App Store Rankings To Attract Cash From Developers”. But as Jason Calacanis responded to this after reading it and other accusations of AppGratis gaming the system — “it’s not gaming, it’s forecasting.”

Now, I’m happy to report that we made more than $9M of revenue last year by helping users discover new apps, and by helping developers forecast their marketing actions. And we are on track for doing $25M this year — even though, in a forecasted $25 billion (with a ‘b’) App market by 2015, that’s still a mere 0.1% marketshare.

Today, whether or not Apple reinstalls AppGratis in the App Store, we have a vibrant 12-million-user community behind us. And in less than two days, close to one million of them reiterated their commitment to our service by signing our petition. We have a killer team. We have cash in the bank that we raised mostly in case of a rough patch (not such a dumb move after all). And we have faith because we know that our work matters to the most important people that we know: our USERS — the people who are actually buying the devices, who are actually *choosing* to download the apps we feature. And Developers, who make the apps, and can eventually make or break a platform.

And even more exciting, we’re back to our roots. A crazy cool daily newsletter with millions of subscribers, that will very soon be complemented by the newest and nicest HTML5 WebApp you’ll ever see. Two things we fully own, and that no one can take away from us. So when I stated a week ago that the reports of our death were greatly exaggerated, I wasn’t kidding. Not kidding at all. AppGratis is just getting started.

Because from the bottom of our hearts, we know we add value to this whole ecosystem.

And we intend to keep doing just that.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

AppGratis CEO Simon Dawlat has been through the storm of his entrepreneurial life in the last two weeks.

Shortly after he raised $13.5 million in venture capital to grow his mobile app discovery business, Apple yanked his app from the iOS App Store, citing several app guideline violations. Since then, his business is in jeopardy, and his integrity has been questioned by those who accused AppGratis of using bots to inflate download numbers for the apps AppGratis featured.

Still, he says, he needs to “keep calm and carry on doing what we’re doing, because it’s right.”

Today Dawlat put up a petition at save.appgratis.com, asking users and concerned members of the public to express their support. The petition quickly gained over half a million signatures in the first few hours and now has over 600,000.

But it’s not about pressuring Apple, Dawlat says:

“I don’t believe anyone can put any kind of pressure on Apple, so really, we’re not trying. This online petition serves the simple purpose of creating an irrefutable proof that AppGratis is first and foremost a community and a product loved by millions, filling a real need. It’s a statement we needed to put out there because there has been so much written already and this is our way to let people know the truth on AppGratis.”

Truth, of course, is the first casualty of war, and it’s very much in question right now.

Conor O’Connor, CEO of discount hotel app Hot.co.uk, said today that AppGratis artificially inflated the download numbers of apps it featured by using bots — fake iOS users. AppGratis, of course, makes money by charging developers to get their app featured in AppGratis’ app, website, and emails. Getting your app featured by AppGratis can result in huge download traffic for your app — many campaigns have driven more than 500,000 installs of an app in a single day, and recent campaigns have resulted in over a million downloads.

O’Connor’s statement is confusing to me, because when I talked to Apple about AppGratis, I specifically asked whether AppGratis had been engaging in any shady behavior regarding download bots. Apple said no, that it was about app store submission guidelines 2.5 and 5.6.

And a source very close to AppGratis told me today that O’Connor is “lying and delusional” and that AppGratis is scrambling to have its lawyers both get evidence of that fact and potentially take legal action.

Meanwhile, Dawlat is reaching out to the AppGratis user community via the online petition for support.

“We’ve always had users in mind first,” Dawlat says. “Millions of them have signed up to our service. We owe them to continue. So we have started reaching out to them yesterday and received over half a million support emails in less than 24 hours. And it’s adding up at an amazing rate right now.”

It’s a strong vote of confidence, Dawlat says. And, he adds, it’s ”the ‘YES’ that says we need to keep calm and carry on what we’re doing, because it’s right.”

photo credit: the|G|™ via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

AppGratis, the app-discovery engine Apple banned from the iOS App Store last week, has started an online petition against Apple that has gathered over half a million signatures in just a few short hours.

And thousands more are adding their names every few minutes.

Apple yanked AppGratis after first approving its iPhone app late last year and its iPad app just weeks ago, saying that AppGratis violated several of the App Store guidelines. AppGratis vocally disagreed and has been trying to have a conversation with Apple about the ban — unsuccessfully so far.

So the French company, which has raised $13.5 million in venture capital, decided to go public with the fight, posting the petition early this morning. In it, the company says “it knows” it has not violated Apple’s guidelines and that Apple customers should have the final say.

And, of course, that Apple should “think different:”

Last week, on April the 5th, Apple decided to ban AppGratis from its App Store.

Because more than 12 million people in the world use AppGratis, this story has been all around the planet.

In an official statement to the Wall Street Journal on april the 8th, Apple said we violated two of its iOS Guidelines.

But we know we haven’t.

And we have written our side of the story here.

Today we believe it’s you, Apple’s customers, who should have the final word.

Today, you can speak up.

Tell Apple that you think different.

Whether the petition will be successful or not is hard to predict. Apple hates negative publicity like this, and going public is often the kiss of death for developers who have conflicts with Apple. But some have succeeded, as when Apple backed down from refusing to allow Lightning and 30-pin charging connectors on a single charge device after almost killing the POP portable power Kickstarter project.

Over half a million signatures in such a short time is a strong signal to Apple that its users — and the wider online community — are interested in AppGratis being able to live on in the App Store.

“We expect much much more in the next days,” AppGratis CEO Simon Dawlat told PocketGamer. ”We needed a strong vote of confidence from our users to keep calm and carry on. And we got it.”

Interestingly, AppGratis’ choice of petition formats is very cleverly selected to ensure at least some form of business continuity if Apple does not relent in this case. Instead of using an online platform like Change.org, AppGratis is asking you to send an email to save@appgrat.is. While there’s no wording to that effect, this would appear to be building up a database of future email subscribers who could be asked to opt into a regular AppGratis email highlighting a free app of the day.

We’ve asked Apple for comments and will update this post with any response.

Image credit: AppGratis founder Simon Dawlat/Facebook

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Since Apple won’t talk directly to it, AppGratis has taken to blogging. Apple did not talk to the French company before pulling its app from the iOS app store, says CEO Simon Dawlat, and it won’t talk now, either.

Apple controversially pulled AppGratis from the app store days after approving its updated iPad version and just months after AppGratis raised $13.5 million in funding to build its app-discovery business. Some reports of the situation have claimed that there was significant back-and-forthing between Apple and AppGratis before the app was pulled, but Dawlat says there was no conversation and no communication.

In fact, he was flying on an airplane to South America when Apple pulled the app. So today, he clarified the situation via the company blog:

“It is important to me and my team that we clarify what happened. It is absolutely untrue that there were discussions between AppGratis and Apple in advance of our App being removed from Apple’s platform. The first communication from Apple we received was an email sent to us after our App had been removed.

Since our App was removed, we have had one telephone conversation with an Apple employee who repeated the content of Apple’s email to us, and refused to discuss the matter further. Since then Apple has not returned any of our calls. It goes without saying that I am still very keen to speak to them.”

If Apple thinks this company will go quietly into the night after having its business model essentially blown up, that is apparently not going to happen. Most CEOs are very fearful of saying anything publicly in clashes with Apple, and Dawlat was measured in his words, but very clear: He wants to talk, and Apple isn’t listening.

In related news, The French digital industry minister has blasted Apple for the decision, and he says he plans to take the issue to the EU to examine the takedown.

“I recall that the French are the world’s second largest developers of software applications behind the United States for mobile devices,” Pellerin told LeMonde Informatique. “What is the sense of investing if, overnight, the economic model is jeopardized by a unilateral decision. … There is an issue of fairness in commercial relations. …”

Obviously, Apple wishes this whole situation would just go away, but my guess is that it’s just beginning.

photo credit: hottholler via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

There seem to be a lot of assumptions flying around about AppGratis.

Last week Apple approved the company’s app-discovery app, then abruptly reversed course over the weekend and pulled it. Sources at Apple that I’ve talked to at Apple say that it violated two app store guidelines: being too similar to the app store, and using push notifications for marketing.

AllThingsD’s John Paczkowski takes Apple’s word at face value, stating “AppGratis did both of these things.” Ars Technica’s senior Apple editor Jacqui Cheng states very baldly in a tweet: “AppGratis *yet again* shows that if people get away with rulebreaking once, they assume it’s endorsed.”

Really? I’m not so sure.

These are the rules that Apple said AppGratis violated, and which Apple is using to justify its ouster:

2.25: Apps that display Apps other than your own for purchase or promotion in a manner similar to or confusing with the App Store will be rejected

5.6: Apps cannot use Push Notifications to send advertising, promotions, or direct marketing of any kind

Too similar to the app store

So let’s look at 2.25. The guideline does not say that “apps that display apps other than your own for purchase or promotion” will be rejected. It says that app that do such things AND do them in a manner similar to or confusing with the App Store will be rejected.

Can anyone really tell me with a straight face that consumers really would get confused between AppGratis, an app that features one app a day, and the app store? As AppGratis CEO Simon Dawlat puts it, after some initial confusion in October of 2012, Apple didn’t think so either:

We were able to make a strong point on the fact that AppGratis had nothing in common with the App Store. The App Store is a 1M+ hosted app catalog. AppGratis is like a media reviewing one Apple product a day like thousands of other sites, blogs, and apps on this planet – dramatically different mechanics. We got OK-ed on this one, since our app was later approved (and has been live for months).

Note that Apple agreed with AppGratis that it was not too similar to or confuse-able with its own app store. Note that Apple ended up approving that app. And also note that this 2.25 guideline was introduced in September of 2012, before Apple ended up approving the app.

“It’s very subjective … it’s how you look at it, and you can interpret it in different ways,” Readdle co-founder Denys Zhadanov, who makes a scanner app for iPhone and iPad, told me today via Skype.

Push notifications

The second guideline that Apple is using to kick AppGratis is 5.6. And exactly the same problem applies.

Apple says that AppGratis used push notifications for marketing purposes, and the guideline states that the notifications cannot contain “advertising, promotions, or direct marketing.” That would seem to indicate something like “buy this” or “App XYZ is now available for free.”

Again, AppGratis CEO Simon Dawlat says he doesn’t advertise:

Yet another surprise for us since we only send one “system notification” a day to our users, coming in the form of a generic, opt-in only “Today’s deal is here!” message, which is precisely how Apple recommends developers to use its push notification service.

Is that advertising or direct marketing? It’s certainly a notification, but it’s not specifically promoting an app or advocating a download or asking for a sale.

Again, it’s up for grabs for interpretation, and it’s something that many developers have to wrestle with, including Readdle, which had notifications but then removed them.

“We personally don’t use push notifications, although we have 12 million users, and I’d love to,” Zhadanov told me.

He’s just decided that given the ability of different people and different organizations to interpret the same things in different ways, it’s just too risky to include them.

So what’s really going on here?

Sources close to Apple told me that apps like AppGratis challenge the app store top charts’ legitimacy, since they can be “gamed” by hundreds of thousands of downloads delivered almost literally overnight. Zhadanov agrees:

“For end-users, AppGratis is a great app, but Apple is a bit concerned how apps can influence the top charts,” he said. “AppGratis has grown too big – every app they promote zooms to the top of the free charts in the Apple app store.”

In a sense, that’s a shot for the little guy … the small developer who doesn’t have the big bucks for the big marketing campaign. In another sense, it just means that advertising and promotion need to happen entirely outside the app ecosystem, and big brands and big companies with big pockets will spend elsewhere to get the promotion and publicity they need to drive downloads.

So there’s a positive side to this story.

But there’s also a very dark side here, which is that subjective interpretations of Apple’s guidelines can determine whether your app sinks or swims, and therefore whether your company lives or dies, and whether your investment of time, money, and sweat is rewarded or wasted.

AppGratis may have violated Apple guidelines, and it may not have. It’s very much up to interpretation and opinion. And very obviously, having first approved and then within days rejecting AppGratis, even Apple doesn’t have the same opinion all the time about the same app.

And, to beat that dead horse yet a little more, the guidelines are — real shocker coming — guidelines. Not rules. Not laws. Not regulations. Which means that Apple reserves for itself the ability to judge what goes and doesn’t. And to change it’s mind whenever it wants.

“It’s not a secret that some guidelines are voluntarily too vague,” app-maker Nuage Touch co-founder Thomas Castel told me via email. “They allow Apple to remove the apps that bother them.”

It’s got that right … iOS is its own platform, and dances to the beat of Apple’s drummer.

But as a developer, how can you build a business on that?

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

AppGratis CEO Simon Dawlat spoke out today about his flagship app being pulled from the iOS app store. And what he has to say should make every developer very, very nervous.

One week ago, Apple approved his app. Two days ago, Apple banished AppGratis from the iOS app store.

It’s hard to overstate or overemphasize that previous statement. It’s hard to express the confusion that such a reversal causes. It’s hard to understand how Apple can expect to treat developers who invest millions of dollars in apps that benefit Apple’s platform and not have a reaction that comes back and bites them where it hurts.

This is not some simple app with one developer in Tajikistan. This is an app with 12 million regular users, built by an international company with 45 employees, that is driving massive user engagement and additional downloads from Apple’s top competitive possession, the iOS app store.

So how did it happen, according to Dawlat?

Apple said yesterday that the app violated two app store guidelines. In addition, Dawlat said today that there was a third that Apple did not mention. Simply put, the three were: too many apps, too simple an app, and too close a similarity to the app store.

Dawlat explains how the company solved each one prior to its iPad app receiving approval last week:

1. Consolidate: Combine all of its country apps into a single major app to address iOS guideline 2.20 (too many versions of similar apps).
2. Demonstrate: AppGratis had to demonstrate its complex intelligence that matches apps to users based on multiple criteria to address iOS guideline 2.12 (too simple an app). (This is pretty funny in an app store with fart apps, by the way.)
3. Differentiate: AppGratis had to to make the case that its app is not similar to the app store and would not be confused for the app store … pretty simple to do for an app that features one app a day versus hundreds of thousands in multiple categories. This addressed iOS guideline 2.25 (too similar to the app store).

When AppGratis successfully addressed those issues, Dawlat says, Apple approved its iPhone app in November 2012. And again, Apple approved its iPad app just last week.

And then Apple completely reversed course two days ago.

As Dawlat tells it, he had extensive contact with a particular app store reviewer for months who guided AppGratis through app store approval, suggesting changes and updates and ways to meet the app store guidelines. Then, a few days after approval, a different app store reviewer seems to have gotten the file. The new reviewer tried to call Dawlat three times on Friday — he was on an airplane — and pulled the app on Sunday due to guideline 2.25 (too similar to the app store).

In addition, the reviewer said, AppGratis violated guideline 5.6, which bans developers from sending advertising, promotions, or direct marketing via push notifications. That was a shock, Dawlat says:

Yet another surprise for us since we only send one “system notification” a day to our users, coming in the form of a generic, opt-in only “Today’s deal is here!” message, which is precisely how Apple recommends developers to use its push notification service.

Dawlat finally had a conversation with the new reviewer Monday, and he says that the Apple employee “seemed very detached regarding the gravity of the situation.”

In my own conversation with people close to the situation at Apple, I have been told that AppGratis was sending too many push notifications and that it impinged on the app store functionality. But the key issue for Apple is neither of those two issues.

Instead, the key issue is AppGratis’ astonishing success.

AppGratis is an app-discovery platform. It’s so successful at helping users find new apps that in some cases it drives 500,000 installs in a single day. Recently, as it has been growing, that’s up to over a million daily installs. And even now, while it’s no longer available on the app store, AppGratis is still on 12 million iOS users’ phones, and it still drove millions of downloads over the weekend, Dawlat said.

Those massive numbers skew download counts, Apple believes, in a way that is not good for the app store top charts and therefore not for organic app discovery via the tool Apple has built for that very purpose: the app store itself. And AppGratis, of course, is getting paid for featuring those apps, which Apple seems to have a problem with.

Dawlat says he’s down but not defeated, and that this is “far from finished.”

But the source I chatted with at Apple suggested that the company won’t change its tune on this one, and that while AppGratis is welcome to resubmit, there’s not a lot of hope.

Which means, once again, that any business you build on iOS rests on the shaky foundation of an app reviewer’s decision … and sudden shifts in Apple corporate policy.

This will not be popular:

Apple, the ecosystem dictator: pulls popular AppGratis from the store, to constrain app discovery bit.ly/Y52Ws5 /via @fredmartinent

— Andreas Constantinou (@andreascon) April 7, 2013

photo credit: Joelk75 via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Good luck getting back on the app store, AppGratis.

Over the weekend, Apple yanked popular app-discovery platform AppGratis. It had been acquiring users at an astonishing 300,000 per day back in February, when I chatted with CEO Simon Dawlat, and just recently took in $13.5 million in venture funding from Paris-based Iris Capital and the Orange Publicis Fund.

Talking with some people today close to the situation does not give me much hope that AppGratis will be back soon.

As AllThingsD reported earlier, Apple found AppGratis in violation of two app store rules:

2.25 Apps that display Apps other than your own for purchase or promotion in a manner similar to or confusing with the App Store will be rejected.

and

5.6 Apps cannot use Push Notifications to send advertising, promotions, or direct marketing of any kind.

My sources confirmed that, and someone close to Apple told me that while AppGratis is welcome to change its app and resubmit it, there was not much hope that it could survive in anything like its current incarnation, though he did note that that the AppGratis still has its website for promotion.

That will be cold comfort for Dawlat and the VCs who have invested in AppGratis.

I also checked on whether or not AppGratis had received any warnings about the banishment. The information I’ve been able to find is that the company was sent an email on Friday that their app would be pulled on the weekend.

One good thing for Dawlat and company: There was no hint of app store shenanigans or grey-hat app marketing or monetization activity. Though there have been some rumors to that effect, this is apparently not the case.

Just a few months ago Dawlat blogged that AppGratis had reached 10 million users and was driving install counts for featured apps of over a million a day regularly.

This is just another reminder than when you build your business on the man’s back, the man can move.

photo credit: jinterwas via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Two months after closing $13.5 million in funding, hitting revenues of $1 million a month, and reaching the 300,000 new users a day plateau, app discovery platform AppGratis has been pulled from the iOS app store by Apple.

“This is going to be an insanely big market,” AppGratis CEO Simon Dawlat told me when we chatted then.

But not for AppGratis, if Apple kills his business.

Update: AppGratis is “welcome to resubmit”

Yesterday Apple pulled AppGratis, which promotes paid apps by offering one for free every day, from the app store. AppGratis has been astoundingly successful, in some cases driving 500,000 install in a single day, and recently, as it has been growing, over a million daily installs.

Apple has not returned repeated calls and emails requesting details, confirmation, or rationale, and AppGratis isn’t talking right now either. TechCrunch speculates that Apple’s new rule around displaying apps other than your own for purchase or promotion might be to blame. That was added in October 2012.

Source: John Koetsier

Not all app discovery engines have been pulled, apparently

(Interestingly enough, user acquisition costs rocketed 30 percent in December.)

Apps, of course, are pulled for all kinds of reasons, such as improper use of APIs, inappropriate content, or simply instability. So there could be some simple explanation here, and all could return to normal quite quickly. If that were the case, however, you’d expect Dawlat to responding immediately on the AppGratis blog, explaining that there is some minor technical issue and that all will soon be well.

Or that Apple would respond with a simple, short explanation of the problem.

So it’s likely there is something deeper here. If it’s about the fact that AppGratis is very successful at promoting downloads, that’s worrisome to both app developers and investors. PocketGamer speculates that AppGratis’ incredibly fast growth caused Apple to pay close attention, and that the company may have used shady methods such as botfarming to grow so quickly.

That’s hard to believe, given that AppGratis has been so successful in driving downloads for others as well, and having had multiple interactions with Dawlat.

The actual wording of the rule that Apple added late last year is: “Apps that display Apps other than your own for purchase or promotion in a manner similar to or confusing with the App Store will be rejected.” If this is the rule that AppGratis fell afoul of, the question is: In what way would users have confused Appgratis with the App Store?

Other app-discovery platforms such as AppHero seem to be still up and running, and a quick search for AppGratis in the app store reveals copycat apps such as Gratis App Hoy still available, as well as other free-app-of-the-day apps such as Free Apps for a Rainy Day and 3 Magic Shots – Paid Apps for Free Daily. AppShopper, however, which was pulled in December 2012, has still not made it back into the App Store, despite promises from the company.

I’m still asking Apple for comment, as well as AppGratis.

As I’m sure both developers and investors will note, StartApp, which provides mobile monetization services for the Android app market that includes a massive amount of app discovery and promotion, and recently hit the 500 million downloads mark, has not been banned by Google.

photo credit: Mike “Dakinewavamon” Kline via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Mobile monetization platform StartApp announced that it has been downloaded a staggering 500 million times today, and that it completes more searches on the Android platform than any service other than Google.

“We’re seeing a billion pageviews per month,” CEO Gil Dudkiewicz told me on the phone this afternoon.

That staggering number of downloads — minus churn due to deletions — has resulted in StartApp’s search app appearing on one out of every five Android devices globally, and StartApp itself coming from almost literally nowhere to being what it calls “the largest independent search distribution network in the Western world.”

The search service is part of a mobile monetization platform that StartApp runs for developers.

When developers agree to StartApp’s terms, they bundle a search portal with their app and get a cut of advertising revenue generated by that search portal. Fifteen thousand apps currently bundle StartApp, up sharply from just 3,500 in July 2012.

Users have the option to install the search icon or refuse it, but enough agree to keep the icon — and actually use it — that StartApp has become a global force in search in less than two years.

“The vast majority of apps don’t make money via downloads,” Dudkiewicz says. “The reason for it is that the paid model doesn’t really work for most of them … and ads don’t really resonate well with most users.”

[Indeed, mobile monetization is one of the areas of focus of our VentureBeat Mobile Summit on April 1&2, where we've invited the top 180 executives in mobile -- from brands, to ad networks, to manufacturers, and more -- to network and discuss ways to push the mobile economy forward].

So StartApp is announcing a new monetization model today in addition to its search portal: Exit Ads. This model, StartApp VP Itay Rokni says, distinguishes between the use of the app and ads, enabling users to use the app as much as they wish unencumbered by marketing and then giving them options to view and download other apps on exit.

That’s an interesting take on the app distribution ecosystem, which already has companies like AppGratis and other free app-of-the-day apps.

“We’re competing with anyone offering any kind of monetization for developers,” Dudkiewicz says.

The company was coy when I asked who its search partners are for the search portal that has been its main claim to fame so far, simply saying that they are “most of the big ones” and that the company was could not be more specific.

photo credit: Express Monorail via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

AppGratis announced today that it closed a $13.5 million series A round of funding to get bigger and even more international, even though the French app-discovery company is already profitable and growing at breakneck speed.

The company partners with app developers who want more downloads by offering a paid app for free for 24 hours. It’s a strategy that has worked — sometimes driving more than 500,000 downloads in a single day. After humble beginnings as an email newsletter highlighting the best apps, founder Simon Dawlat has taken the company to a top-10 app in 30 global markets, generating over 100 million app store referral clicks last year alone.

“We didn’t need the cash,” Dawlat told me yesterday from New York, where the company is setting up an office. “We are cash-flow positive, with $1 million in revenue for December 2012. But this is going to be an insanely big market, and as we grow globally, the costs go up exponentially.”

Dawlat founded the company in his native France, and has pursued a strategic approach to growth, attacking small regional markets first, and only coming to the U.S. last December. Now AppGratis is adding new users — downloads of its popular app — at a rate of 300,000 a day, with half of those in the United States.

“We’re getting this traction out of more than 30 markets,” Dawlat said. “We’ve been top 5 in the iOS app store for about 5 weeks and are driving insane traffic. Japan, Brazil, and Latin America are all also seeing crazy growth.”

Dawlat sees 2013 as the “start of an exponential curve” in mobile, and for his company, and the $13.5 million will go towards international growth, including some new offices, as well as attracting top new engineering talent. What it won’t go towards it a lot of new AppGratis features.

“I see so many people throwing dollars at building complex products,” he said. “But we want the simplest product we can possibly build.”

One place the company will invest? Where it doesn’t show, at least not immediately. AppGratis’ recommendation engine, the intelligence that drives what apps get recommended to what users, already takes into account what apps you already have, and based on that, which new ones you might be likely to enjoy. Dawlat plans to beef up that artificial intelligence.

All this growth and cash is a little overwhelming for what was just recently a very small operation.

“We’ve been approaching the US market very cautiously almost with a bit of fear,” Dawlat told me. “We’re a little French company, but the growth we’re seeing now … this is completely mind-blowing for us.”

The funding round was led by Europe’s Iris Capital, with participation from the Orange Publicis Fund.

“AppGratis is a champion in the fast growing app marketing market which is expected to be worth $25 billion by 2015,” Sophie Dingreville, a partner at Iris Capital, said in a statement. “The AppGratis team has built a successful, profitable business in a short period of time and they are in a strong position to become the global leader in app discovery.”

photo credit: Stuck in Customs via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

In 2008, a French engineer in Silicon Valley started a newsletter about a fascinating new slice of the technology market: mobile apps. Today, his company regularly drives 250,000 downloads for featured apps — and sometimes more than 500,000 — for developers willing to pay the price.

“It started like Craiglist … a daily newsletter every morning with my picks,” AppGratis founder Simon Dawlat told me this morning from a snowy Paris. “I knew a lot of developers, and offered some deals.”

The newsletter quickly went to the web, and two years ago from web to a mobile app (kind of a no-brainer when you consider that the entire company is about mobile apps). Dawlat thought the app store was going to be huge, but that someone had to take care of the “pain in the ass” markets.

Those markets are the ones that are generally forgotten: Belgium, the Netherlands, Luxembourg, and other smaller European nations. Plus, of course, the Germanys and Frances of the world that don’t immediately get served with an English-first (and sometimes English-only) strategy. It turns out that focusing on niche paid off, big time.

“That’s when growth went hockey stick,” Dawlat said.

What AppGratis created is a community of customers who were interested in mobile and wanted more apps. AppGratis gave that to them — for free or reduced rates. (Hence the “gratis” part of AppGratis.) Six million people currently have AppGratis installed, and a million open it every single day. Of those, 25 percent to 40 percent actually download and open the currently featured app.

After gaining a foothold in Europe, AppGratis moved to other underserved markets: Brazil and Mexico. Currently, the company is at 30 countries worldwide, including the United States, where AppGratis launched just yesterday.

How does it work?

“We’ve created a self-learning algorithm,” Dawlat said. “When you start using the app you have the basic app set everyone has, but the more you use it the more we know what you like, and we can recommend apps to you.”

Those apps aren’t just automatically referred to you — there’s a team of 20 editors in Paris focusing on curating the best apps and bringing the best app deals to AppGratis users. Those 20 will soon be bolstered by a team in New York, a team in San Francisco, and São Paulo.

“We want to have local people in every significant market,” Dawlat told me.

So how do you get featured on AppGratis?

It starts with not sucking. Those app editors in Paris are looking for quality — AppGratis has featured the likes of Spotify and Flipboard. But it does includes some sucking up. Dawlat gets dozens of emails a day from developers desperate to be featured in AppGratis.

And yeah, it does take some cash.

While AppGratis makes a lot of its money straight from Apple in form of affiliate commissions, developers can pay between $1 and $2 per install. That’s a pretty standard pay-for-install price, but the price varies depending on the market, on whether you’re targeting iPhone (which has higher average revenues per user) or iPad, and other factors.

But if you want instant iOS traction, AppGratis is a very interesting option. And possibly, in the future, on Android as well.

photo credit: Karin Beil via photopin cc