Selling iphone apps as tough as it gets

Peter Tenereillo made a good deal of money, and achieved some prominence, as the developer of the Cisco Pix firewall and load balancing servers. Like many successful techies, Tenereillo indulged himself a bit, buying a rare Ferrari 599 (base price $302,000), then plowing his earnings into a new company.

The Ferrari is gone now, along with a lot of his cash. But Tenereillo, founder and president of Trapster, isn’t singing the blues and hasn’t given up. He’s doubling down, he’s hammering new code, and he has a basketful of new apps in the works.

Along the way, he’s learned a lot about what it takes to succeed in the world of mobile apps and says he wants to share those lessons with other struggling developers. Here’s some of what he’s learned.

You need a critical mass of users — but you can’t get there if the iPhone is your only platform.

Location-specific apps have to be very location-specific, or you risk the wrath of users.

Market your butt off.

You’re going to make enemies.

Lots of iPhone users, but no revenues

I first met Tenereillo briefly last fall as he hung out on the fringes of the Demo Fall 2008 conference in San Diego.

Not well-connected enough to be one of the 72 companies pitching to a select audience of investors, he networked and made his own informal presentations. How did he garner attention? Tenereillo slipped a valet parker $60 to leave his flashy car, emblazoned with Trapster stickers, in the conference hotel driveway. People noticed.

The app he showed off is called Trapster. Simply put, it’s a GPS-powered alert service that tips off drivers when they are approaching a known speed trap. No, it’s not a radar detector.

It relies on a community of users to spot the traps, then tap on a map displayed on the screen when the app is running. The service, in turn, stores the information, then sends out an alert when a user is approaching the hidden traffic cops.

If multiple users confirm the location of a particular speed trap, the icon shows up as red. Less credible locations are colored green.

I have to admit that I’d rather see people drive responsibly than fake out the police, but hey, that’s just me. The app is pretty cool, and it has a user base of about 350,000, according to Tenereillo.

That may sound like a lot of people, but it isn’t. “You don’t make money [with ads] when you have a base of 350,000,” he says. And since he’s not charging anything for the app, the revenue stream at the moment is zero.

A key part of Tenereillo’s strategy is to run on a variety of platforms; Trapster supports 10, including Symbian, Windows Mobile, and BlackBerry. After all, the installed base of the iPhone is measured in just the tens of millions, a fraction of mobile users worldwide. Competing products such as NMobile that run only on the iPhone have had even less success.

Indeed, competitive pressures forced Njection Mobile to cut prices on Apple’s App Store from $9.99 to 99 cents, says founder Shannon Atkinson. Like his rival, Atkinson founded Njection Mobile with his own money. “Right now, it’s flying out the window,” he says ruefully.

Limitations in the iPhone make great apps harder to deliver

What’s important to understand is that the iPhone application environment is very difficult, so it’s no surprise that people like Atkinson and Tenereillo are getting tense and pretty touchy.

In a perfect world, Trapster and its family of related apps would be “on deck” — industry speak for being featured on handsets served by mobile carriers like Verizon and AT&T. But Trapster isn’t on deck, and because its user base is still small and its content a bit “edgy,” Tenereillo figures he’ll likely stay off deck.

That’s why he’s marketing so hard (he’s managed to get major media attention, including spots on CNN) and developing apps using the same core technology. One is called AwareSpot. Unlike Trapster, which relies on the so-called wisdom of the crowd, it alerts drivers to major traffic problems using information from police and other trusted sources.

In its original incarnation during an early run in Rhode Island, the company made a major development mistake: Users were spammed by text alerts, because the service assumed that all drivers wanted alerts from all over the state. “I got many, many furious calls the next day and alienated thousands of users,” says Tenereillo.

Users of the service can now customize it by plotting out routes and specifying times they’ll be driving. But that brings up a problem with the iPhone as an application platform: Unlike some mobile devices, the iPhone runs only one application at a time, so if users don’t have AwareSpot running on the way to work, they won’t get the alert.

Tenereillo came up with a work-around that involves sending a text message to the iPhone, but it’s obvious that developers would have an easier time if their mobile apps could just run in the background.

Don’t mistake this post for a knock on Apple or its platform. Instead, see it as a cautionary tale and adjust your expectations and strategy accordingly.

This story originally appeared on InfoWorld.

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