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Hard Lessons Learned on How Not to Create Publishing App Business

Post Mortems

Opportunities are everywhere, but to make great things you need patience, love and enthusiasm.

2013 was obviously the year in which Devana as a company learned a lot of valuable business lessons (like the ones about building a game company and a mobile apps company). We became a startup accelerator of sorts and we lost more than $300,000 USD that year alone trying to build startups.

This is a story of our third attempt in the mobile market.

Apple Newstand was launched at the end of 2011, allowing everyone to publish and make available a niche magazine to all iOS devices. It was 2013 when it really started taking off and I convinced Boris Krstovic to join me in an attempt to create a business that will utilize the great expansion of this new market.

Everything seemed to be straightforward and relatively low risk:

  • Secure investment – check
  • Come up with an interesting niche – check
  • Secure passionate editor and contributors – check
  • Secure great magazine design – check
  • Secure technology to power the magazine – check

Everybody loved the idea and soon Vital living magazine was created. And it was a thing of beauty!

We had great content and great design. The newsstand market was not yet as saturated as the games and app markets were. We were almost certain we had it this time.

The business model was very simple. You can download the first issue for free, and then you can subscribe to/purchase the following issues.

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By the time of the launch Vital Living Facebook page had nearly 9,000 fans. Our magazine looked great and it was a pleasure to read. It used all kinds of fancy technology available to us that normal magazines didn’t have access to, like interactive content and page analytics.

As the launch day approached I started to realize that we are still missing the main thing that led to our demise the first two times. The reach.

And the launch day came and subscriptions started selling…

… At a measly $20/month level or so. Because nobody could (again) find it.

It was again the confirmation that we built something that had value, but was found only by some random people going deeply into the vaults of Newsstand. We create two more issues (a total of three were made) before we called it quits.

Lesson 1: No matter how good the product is, you will fail if you do not have reach.

I can not emphasize that enough. Interestingly the app had abnormal conversion, something like 20%. This means that out of 100 downloads we would get 20 magazine subscribers! The only problem was that 100 downloads took months to achieve.

Lesson 2: Sometimes you need to take the dip and be patient. Success can not always happen on the launch day.

To this date I regret not going all in with this one and buying an ad in Vogue or something similar. An app with such insane conversion from free to paid is remarkable, but at the time I simply had enough with mobile.

I was almost sure that we could solve the problem of reach by the fact that we were early in the market. However things with App store develop fast and in the three months that took us to build the first issue, the size of newsstand grew by an order of magnitude.

Lesson 3: In mobile, if you want to have a good chance to be an early entry to the market, you basically need to be one of the VIP developers that get access to new tools and features by the OS vendor.

This project the we lost ‘only’ $30,000 USD. It seems that with time we learned to be more focused and more effective but still could not solve the problem of reach in scale.