The opening of a mobile development studio from scratch in St. Petersburg - 3.5 years later. Reincarnation. Part 3

And hello again ... I continue the long read about our experience, without the "glosses." The picture above is just for attracting attention.



Part 2 and Part 1 are required to read. No, of course, you can not read, only then skip this article boldly :). In part 2, I launched the survey, it is necessary to continue or not - the overwhelming majority approved, therefore, meet part 3 ... By the way, here is a paradox, I placed a piece of material on pikabu for curiosity, and you know what? Nothing but "-20" to that karma. I'm afraid to make conclusions hasty, most likely people are waiting for other material there. I remind you that I am telling our experience of creating a company for developing mobile applications from scratch, recalling 2 years of experience and adding it ( upd.2016 - with a new look ).

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I wrote in the comments that sometimes they pay 15k rubles per hour for such knowledge. Christmas trees, sticks, apparently not doing that. It is necessary to go to the business coaches, mentors, consultants, info-businessmen. But I will be glad if what has been said will help someone achieve success, I am not at all afraid of competition, and I don’t follow the latter at all - everyone has his own way, which is good for entrepreneurship. We have our own channel on youtube, every day (working) we record short videos, sometimes even at the end of the day - our experience, without fantasies, cunning, etc. Subscribe, I will be pleased :) and I hope you find it useful.



So let's go ...



Financial results of work a few months after launch.







If you look at the p / l until September 2013, you can see an increase in the costs of the wage fund and the purchase of fixed assets (administrative costs - repairs, notary fees, office supplies, some operating systems that are not related to IT, office supplies, water, etc.) . But there was also a portfolio on our site (modest of course).

(upd.2016 - these are friends, honestly - well, I would never do it all again, like we did 3.5 years ago when we opened a business. Like children, by God. We were just lucky that we didn’t have "A key client (or better than two), we were able to develop up to 19+ people today. I want to write - we were smart, we clearly understood what the client needs, we analyzed the market, we worked 14 hours ... crap. Complete crap. Yes, we worked and tried, but the market was empty, and we were able to gain a foothold in it, but the market was empty in terms of competitors, since the mobile s app 3.5 years ago, a massive business segment were not necessary as the need is now. Create a similar business today? No. I would not. And then we were just lucky. I advice generally try not to give, if you do not ask, but he would be engaged in right now other projects - for example, blockchain, bitcoin, VR / AR, etc. Although more on that later, there is a huge trap in this kind of promising projects - too long “death valley.” The market at the end of this year 2016 for the development of mobile applications has formed, there are many companies, they have a portfolio, etc. And even (!) There are ratings of mobile development studios - I’ll express myself, I’ll definitely speak about these ratings, but later. There are still parts of the opus in the mind :)

Legal expenses - we once attracted a third-party organization to verify our application development contract. The main focus was on exclusive rights to the result of work. Our work model does not involve the transfer of exclusive rights to the source code. There are several reasons for this, and the most important one - we have a central server part, which is common for all projects, plus - we very generously replicate the achievements of one client for others. By transferring exclusive rights, we place ourselves at too high a risk of possible disputes with customers. Therefore, we transfer non-exclusive rights, and the client may, according to the contract, do whatever he likes with the applications. For all the time of our work, there have not yet been any particular disputes with the legal departments of customers, since we position the solution as a platform to which you can connect.

(upd.2016 - let's face it - in Russia there is no established clear practice for analyzing the source code of the software for evaluation - did you use in the following works a fragment of the previous one or not. Now we transfer exclusive rights for all custom development, if they are not based on industry solutions for trade. In the latter case, we transfer non-exclusive rights. But even in this case, the team develops best practice and code snippets that simplify the work in the future. For all the time, we have never had a trial with lientami and it plays a role - in large tenders is essential)

The contract provides for a clause according to which, if our company cannot fulfill its obligations (bankrupt), then we undertake to transfer all source codes and conduct training for the customer’s specialists. It is noted that small online stores are most afraid of not receiving exclusive rights, while large companies are very calm about this. There were requests for the transfer of source codes, and we came to an intermediate solution for ourselves that we can rely on the experience of the company 1c-bitrix: the source codes are sold. But for a year of work, no one has ever bought, which makes it possible to conclude that most companies only need source codes and exclusive development rights in words, but in fact they just need a working solution, quickly and inexpensively. In fairness it should be noted that for a number of major projects with well-known brands, we, for some parts of the development, prescribe exclusive rights to the result. For the year of work, we have formed a fairly loyal contract, which is in fact a contract for the maintenance of the basic functionality. To him, there is an additional agreement for revision, which are made out the order forms. This approach is quite convenient and understandable to customers.

(udp. 2016 - the contract was altered 10 times. But the latest project to build a federal network of beacons iBeacon / Eddystone made me doubt that we had reached the ideal :). For example, if you selected a team that works on a project, it is highly desirable to pay tiny bonuses separately to these people, for example, 1000 rubles each. per month, and when paying out, clearly indicate that this bonus is for participation in the project *** under the contract ***. Why? This can be crucial in the case of litigation of the participation of certain specialists in a particular project and the definition of the right-receiver of the work results. I don’t think the truth is that 90% of customers are fundamentally ... Conclusion? There is no perfect contract and there will always be adjustments. Well, nothing wrong with that. What should be afraid of? I personally do not sign contracts with heavy fines that exceed 50% of the cost of development, especially when it comes to NDA. We recently launched a large project, which was the most “butted” with the NDA agreement, in the original version of which a fine of 5,000,000 rubles sounded. under fuzzy conditions of its imposition and oral transmission of confidential information ... I thought here, but you can do business on such contracts! .. concluded, and immediately sued, saying they disclosed my commercial information ... but what? A good business can be very naughty ... in the case mentioned, the guys are perfectly adequate and we agreed on all the nuances of the NDA in the amount of fines, but I strongly advise you not to agree to heavy fines exceeding your project profitability or equal to the cost of the project. After all, in the end you can do the work, and then get a lawsuit and a fine. Some customers are asked to leave the "tail" in the amount of 10-20% of the contract value for the end of the entire project - this is normal, although it increases your risks. In general, I will say this - the more “fractional” you can close the entire project with pieces, the better for you and the customer).

By the early autumn of 2013, the concept of our business clearly crystallized. We take into work only projects for companies of the retail segment, selling through the Internet and / or having an assortment that is available for an order for self-pickup (I’m of course drawing the customer’s portrait too clearly, there are different customers, but the assortment is already built around further logic - loyalty, payment, push, etc.). We developed applications for free, including design (of course, trying to rely as much as possible on our developments) and offered 3 platforms as a base: Apple iPhone, Apple iPad, Google Android. Quite unusual, but even considering the free development for Windows 8 and Windows Phone, customers rarely asked them to do these applications. Support was 15 000 p. per month (excluding VAT, because we are on the simplified basis) for all platforms.

(Upd.2016 - that's what nonsense, looking back. Rather, it can be justified only at the stages of business formation, if you have investment money. We had it and the market was empty and we were ... lucky and we stayed on it and have grown to the current state. But for myself I’ve understood one rule - you can never do anything for free. And as for the support that it’s higher now, but it’s worth it - the client is constantly asking questions, frequent updates of ios / android introduce errors that have to rule, Microsoft Azure cloud resources are growing in ene, etc. And yes, we almost stopped making Apple iPad and a Windows application - it's just not the customers need).

Gradually, we even stopped actively offering these two platforms (Windows 8 and Windows Phone), since at that time, for us, this would be a completely exorbitant burden for developers, because there are deadlines set out in the contract (40 working days, this is natural with a margin). By the way, looking ahead, I will say that at the time of this writing, we follow the same approach to development, only made minor changes, because Portfolio and developments already allow us to slightly improve conditions for us: support now stands at 18,000 r. per month for all platforms, the development is still free, and the design, if we do it ourselves, is 18 000 r. for each platform one-time. In this case, customers do not really want to do the design on their own, although it would seem, you can save. The conclusion is quite simple - the price of the issue is not so critical that the company diverted internal resources to this work. Frankly, these figures are not the result of some thoughtful mathematics and market analysis, but an empirical assessment of comfort for the customer. But this approach only works if you are engaged in a narrow segment of the market and have experience in both the program code and the general understanding of the customer’s processes.

(upd.2016 - I haven’t seen for 3.5 years that a client could make a prototype and design independently. Many have tried, but nobody has done it. This is understandable - not their task, they have a core business that diverts internal resources. In addition, We have 3 designers on staff who are non-stop communicating with developers in the interface design process so as not to design a deliberately inoperative story. The average project life for two ios / android platforms now leaves about 5-6 months for a not very complex project. note that in 90% of cases the client has no tons Technical task. And we offer to make graphic prototypes of applications and site, which, in fact, will be the best task for the project. I recorded a video describing this approach. It just saves us and we use it for almost all projects ...).

It is worth saying a little bit about the fact that there is such a “basic functionality” that we offer for free. In fact, this is all that is needed to launch the first version of the applications for a retail company with delivery or pickup. And we are gradually expanding the functionality of the basic capabilities, adding, for example, the withdrawal of related products, reviews, product ratings, banner management, push notifications (with a personal account), etc. Naturally, no functionality will cover all customer needs and most often we ask for a one-time payment for integration with the back office (registration, authorization, personal account and other “charms”). How many ask? Here, simply, based on experience, the figure is in the range of 70 - 90 000 r. If something familiar (1C-Bitrix, for example) is cheaper. In the near future, we will add interesting things to the basic functionality, for example: geofencing - sending push notifications when entering a given radius from a point of sale, paying with cards immediately from the application (bypassing the Apple Store with their commission), etc.

(upd.2016 - it works now. People do not really want to take risks and are ready to make a proven solution on the market that works for others. The decision making psychology is very simple - it works for a company *** on the same market segment, and therefore it should work for me! Reduced time for decision-making are more likely to make a successful project. and by the way it is quite normal practice and the work of such an approach strongly approve. Moreover, the offer the customer to make the first version of the app simple, without complex integration issues rich functionality, and then calmly develop when the return is visible. The more complex the project, the longer it goes and the greater the risk in it. I’m generally very impressed with industry-specific solutions with ready-made components that are easy to customize. applications for trade and services will be moving in this direction.It was at the Web Summit 2016 in Lisbon and noticed that there are many site designers who offer ready-made and easily compatible components for quick launch of the site. And it is claimed! )

Pros and cons of our chosen business path

I want to reveal our business model a bit, to show its pros and cons. First about the cons. There are two sources of monetization: improvements from existing customers and payment of technical support (18,000 rubles per month). Therefore, we need to constantly expand our client base, while at the same time trying to convince the client to make applications progressively, using our practices, not “falling over” immediately into some complex, multifunctional projects. Basically it turns out, but there are exceptions. Any exception slows down our work, and we risk switching to a purely customized development plane. Custom work will allow you to get a larger one-time payment, but it will strongly distract developers, so the rest of the projects will “hang”. But! Surprisingly, for the client, progressive work is a big plus too! The risks are reduced, the timing of the release of applications in sufficient basic functionality is reduced, the client base begins to be recruited, feedback is being provided, and so on. The downside, naturally, is that we need to do the work, often without receiving any money, which requires investment to feed the business. Therefore, I do not recommend this model of work for a team that develops at their own expense.

(upd.2016 - I have already mentioned two times that it is impossible to work without payment. You can coordinate with the client a progressive launch of any complex project so that he can see the results of the work. We do not work 100% postpay at all. Recently, we lost the tender of a large trading company for a very large work on mobile applications, as the company was not ready even for post-payment in several stages of work! Only on the completion of the entire project. Lost, although they were in 3 selected companies, but I refused such obligations ... It is extremely risky and I don’t with The answer is to work like this - everyone wants to "eat" now, not when you do everything the client wants. It happens that the client asks to start work as soon as possible and promises to pay the other day. And these "days" drag on for weeks, and you work and work, and then ... the client apologizes and says - "I take a pause to think it over again" :) - and you spent your time, and time = money. In any case - the more customers the better, this is a simple truth, which is confirmed by our practice. Why? Constantly there are improvements, and this forms a steady financial flow. And this “stream” will be your salvation in difficult times, which will definitely come.)

Pros? Concentration on one business segment (retail sales) allows you to feel quite confident in the negotiations, because in the process of work you get real competence how can applications help (or can not, if a business is lazy to promote them). Free development as part of the basic functionality is a definite plus and quite significant. Often the client is ready to try, without knowing the value of the applications, it is easier for him to put into the budget 18 000 r a month of marketing funds than “knocking out” the management of a one-time payment of hundreds of thousands of rubles, knowing that if it does not work out with us, it will refuse. We do not make any obstacles for this, and our contract is more than loyal. And I think the most important plus is that retail segment companies have similar processes and any improvements (and they are regularly) can become part of the basic functionality in the future, and in the present they are offered to other clients for a small amount of money (adaptation in essence). For example, one company asked to make the functionality geofencing. What is the point? We, through a personal account on our website, make it possible to set up a push - notification on different platforms if a person has entered a given radius from selected stores (say 500 m.). What to send push'em? For example, a reminder of a promotion or a mobile coupon ... but what can a business do? The company paid for the revision of a one-time order of 45,000 p., Which is not so much, because we understood the value of the functionality for other customers. And yes, indeed, many liked it and people ask to implement it (we call it adaptation). I can not say that improvements for one company are always applicable for others, but roughly speaking it works in half of the cases.

(upd.2016 - looking back, I confirm - the industry solution and concentration are doing their job. We are now 90% of mobile application development projects for the b2b / b2c trade and services segment. Projects are becoming more and more difficult, but we have practically no tasks in the field of Telecom , AR / VR, media streaming, TV, etc. - they are followed by other teams, and this is absolutely normal, because the customer is trying to reduce his risks. The more similar projects in the portfolio, the tendering position you have and more confident in negotiations. The main thing is to have a wide enough market We try to enter the Western markets, we get a lot of tasks, but there are a lot of specifics that still prevent us from becoming a successful company there).

It is worth noting one feature of mobile applications, which, I am sure, is familiar to Habr's readers - applications need to be promoted. If we talk about retail companies, then, as a rule, everything is not bad with promotion channels. Usually there is a visited site where you can place all sorts of banners with calls to install applications, and, most importantly, there is a retail network with visitors. Even simple stickers with a QR code and brief information placed on the cash desks can give good returns in installations. Paradoxically, we often encounter the fact that the company, having received mobile applications, is simply lazy to get active (and free for it) promotion, then complaining to us about a small number of orders (although we even write instructions with tips on what to do). In general, analytics of the behavior of retail customers in mobile applications is a topic of a separate and large post, now I’ll note that orders go to different categories of goods (the horeca segment is best, then fashion and at the end of HAE), and their amount varies from 20,000 rubles a day (fashion, small average check, but high marginality) up to 600 000 r. and above for businesses for the delivery of products (sushi, pizza) at home. Now, through all of our released mobile applications, we see a turnover in excess of 30,000,000 rubles a month, which is not so much for a good, strong online store, but not bad for a young, in general, industry called “mobile applications of retail companies”.

(upd.2016 - we made a special website info.notissimus.com where we provide indicators for all of our trading mobile applications. Indicators are generalized, because we cannot disclose the data of each particular client. So, the amount in money of all transferred orders for for all our mobile applications for the year amounts to 712 million rubles !!! These are honest numbers, we don’t screw up and screw in. Yes, of course, sales through mobile applications are still lagging behind sales through websites, but they are growing and this trend will continue. I myself saw turnover of 5,000,000 per day in one project for the fashion shopping network from mobile applications only. There are many more interesting generalized indicators on this site ... it’s interesting to know the truth - what will happen after the applications become ubiquitous? What technologies will determine the development vector on the next 5-7 years?)

I thought that I would fit into 4 parts, but I see that there will be at least 6. In the next part I will tell you how we are looking for clients now and compare them with how we looked for them 2 years ago. In general - stay with us, subscribe to the video channel - at the time of this line posted a video about my trip to the Web Summit 2016 in Lisbon ... what interesting things the world does in the IT field!



ps For those who want to get much more information on different tools on the Internet, we advise you to refer to the publications on the site http://startup.today