Making money from mobile apps 

A passenger pairs with a Safe Boda rider in Kampala recently. Safe Boda is one of the most used apps in Uganda. PHOTO | KELVIN ATUHAIRE

What you need to know:

MTN mobile money is the largest application across with about six million users. The only way you can get such users is if you are using the very basic form of application for a person to use which is Unstructured Supplementary Service Data (USSD). 
 

There are billions of dollars in the mobile app industry. This is encouraging news to those with mobile apps or thinking about developing one.
For the last five years, Mr Derrick Lyazi, an android programmer, gave up on developing mobile applications due to high investment needed to push the application amongst the public and there is no guarantee for positive results.  
Mr Lyazi says after many unsuccessful endeavours, he searched on Internet on how to make money on mobile apps. Since most developers concentrate on service applications, the game applications industry is much bigger than the former. 
“There are people willing to spend on mobile games, they either integrate their ideas to the app or promote it to make money out of it. The clientele is international in most instances. A developer can sell their mobile application games on websites such as Flippa.com, IK project.com. You simply create a game and put it on Google Play Store, issued a unique ID. The developer inserts into Google Play description of the game and it goes live,” he says. 
“This is an industry that has given me some money. It is sustainable and reliable; you simply create, and put it up and people pay you for the ownership. An App can go for more than $1,000 (more than Shs3.6m) on flippa.com depending on the level of stages, uniqueness, creativity and others,” he adds. 
Mr Lyazi has been able to make two to three apps every month for the last three years. The more investments incurred in an app, the higher chances to get a highest bid or more returns. 
When you are selling an app, he says, one has to show that it is receiving downloads. This calls for investing in promotions and marketing. 
“However, sometimes you have limitations to put out the best, on average, I earn between $80 (about Shs290,000) and $120 (about Shs430, 000) and my highest bid has been $1050 (about Shs3.8m). I have found that profitable than incurring more resources on pushing out an app to the market. There are people who will promote the apps to make more returns from them,” he says.
It is a different story for Mr Allan Rwakatungu, the proprietor of Xente, who envisioned to expand his horizon to a digital mall away from the usual physical malls. Xente is a digital mall and digital wallet that people and businesses use to purchase products through cashless payments.
Just like a mall, Mr Rwakatungu says, Xente is a market place that aggregates different brand products into personal and business apps. 
“Customers come to our app to purchase products easily and conveniently. In addition, we provide our customers with digital wallet fund from mobile money, Visa and MasterCard that makes it easy for them to make payments. We take a small cut from every transaction made,” he adds.

Economic environment for apps
Apps or tech businesses are hard like any other business, especially in developing countries. 
According to Mr Rwakatungu, tech businesses require investment in building competent teams, building the product and acquiring customers. 
“Market fundamentals are not in our favour. Our African markets have structural problems such as low incomes, illiteracy, limited access to smart phones and computers,” he says.  
Mr Rwakatungu says despite the challenges, the opportunity is huge. He says the market is still virgin and people are looking for solutions to make their lives easier to live whilst saving time and money. 
“There is still need to encourage innovation, embrace failure as a natural outcome of innovation and if we work hard and smart enough, we will crack the market,” he adds.  
Available statistics indicate that about 100 apps are uploaded to the market daily of which 35 per cent of those make an impact on the market.  In Uganda, there are many apps cropping up daily which gives modern app users experiential fatigue. 
“You will find that most people today limit their frequent daily interaction to utmost three apps. Ideally, if you are creating an app, find out whether your product assumes or encourages frequent usage by a customer, says Ms Samantha Niyonsaba, Future Lab lead at The Innovation Village.

Earning money from apps
Ms Niyonsaba says the success rate of an app is at 0.01 per cent meaning chances of failure are very high. To be among the top three frequently used apps, you have got to consider factors that make your app commercially viable and some of the critical questions to ask yourself are: What would interest your target market?  What is competition doing? And most importantly your budget.
For one to make the app viable for the marketplace, Mr Micheal Niyigeteka, Information Technology Consultant, says in order to succeed with apps business, a developer needs to know the problem they want to solve, is the problem eager enough for people to pay for it?.
He says with untraceable market, one needs to understand the user and what technology they have access to, what are they spending on, for instance, how much is spent on data bundles.  
“You need to understand the different dynamics, is it for a social cause and probably looking for a funder who will fund the investment or you hope it will become such a popular app for many people to use,” Mr Niyigeteka says.  
If one’s app becomes popular, some of the big players in the industry like Google would want to engage you due to the value associated with your work. 
For starters, an application to generate revenue could be designed as a revenue driver or incorporates advertising. 
“For example, Jumia is a good example for revenue driver, one is purchasing stuff and money is transacted,” says Mr John Birungi Babirukamu, digital director QG Saatchi & Saatchi.
One can make money off advertising through google adverts. He says one of the largest applications from 2010- 2015, Candy crush earned 300 million installations. It was making most of its money off adverts together with some small purchases. 

Why Apps don’t break even
Mr Babirukamu says the problem with applications locally is they don’t have the numbers. MTN mobile money is the largest application across with about six million users. The only way you can get such users is if you are using the very basic form of application for a person to use which is Unstructured Supplementary Service Data (USSD). 
“We have 28 million people with phones in Uganda, only about 9million have smart phones. That means a whole 19 million don’t have access to the internet based applications. Even a huge number of smartphone holders, nearly 50 per cent are basic entry level users,” he says.  
He adds that the problem with app developers is that they build mobile apps, web applications and ignore the USSD. Having USSD opens your application to a wider market. By default without USSD, you are cutting out many people on smart phones.