Paul Graham’s response I felt particularly rang true, and is something to think about. Paul Graham earned his FU money from cofounding Viaweb which later sold to Yahoo.

One thing you learn when you get rich, though, is how few of your problems were caused by not being rich. When you can do whatever you want, you get a variant of the terror induced by the proverbial blank page. There are a lot of people who think the thing stopping them from writing that great novel they plan to write is the fact that their job takes up all their time. In fact what’s stopping 99% of them is that writing novels is hard. When the job goes away, they see how hard.

It sort of goes with the whole cliche that money can’t buy happiness, but it also provides some good insight for people who might see their job as an excuse not to do whatever they really want to do.

Now, it also reminded me of TED talk by Dan Gilbert on Happiness which I thought was particularly revealing. I’ve linked to the relevant moment here (14minutes, 22seconds in).

Gilbert describes a study which proves that “choice” is actually detrimental to happiness. And what provides more choice or freedom than a huge windfall (“FU money” so to speak).

Gilbert describes a study at a university. Students take a photography class and at the end have 2 framed photos of their favorite work. They are split into two groups. 1) Pick a photo, and you’re stuck with it 2) Pick a photo, but if you change your mind you can swap it out for the other one within 4 days.

Turns out the people who have a choice about their photo are less satisfied with their photo even after the 4 days is up. By simply having that choice, they are ultimately less “happy”. So, people tend to be happier when they have no choice presented to them.

I feel like this applies to those who find themselves with complete freedom in their lives. Choice means you have to actively make a decision, and generates questions of doubt about decisions you make. In many ways, not having the decision is a simpler, albeit naive existence.

Now you may ask me if I’m happy. While I didn’t have a huge windfall, I do earn enough that I don’t have to work at a real job. So, I am doing what I choose to do, not what I have to. As a matter of fact, I am very happy, but I did think about these very issues alot when I first earned my freedom. Issues that I’d never really thought of before.

But, the more I think about it, the more I think there will be great hesitation for many developers (and I’m thinking mostly of game developers) to make the plunge.

Now, some apps clearly benefit from this. Comics for example is a comic book reader that sells more downloadable comics. It was $0.99 before today because they had to be. But now, they are free and will make their money on selling individual comics. Same with book readers, or other similar models. Even a game like Tap Tap Revenge 3 would benefit…. though sitting at the #1 spot at $0.99 makes me think they aren’t going to change their price anytime soon.

So are game developers suddenly going to release free games with add-on purchases? I don’t think so, and here’s why.

Lite versions aren’t always in your best interest.

I know customers want there to be a lite version of every game that exists… but, depending on the game itself, a lite version is not in the best interest of the developer. Lite versions can hurt the sales of a full version. This can be for a number of reasons, primarily that people simply didn’t like the game as much as they thought they would. For this sub-section of games, Lite’s hurt.

Now, if you release a Lite game and find it’s hurting sales. The easy solution? Pull the Lite game. But if your Lite is your Full version too, well, there’s not as much you can do about it, nor will you even likely know it’s a problem.

Lite Versions are a Good Second Push

Most games don’t come with a Lite version on Day #1. This isn’t an accident. Your game is going to get the most press on the day it launches, and you want people to buy it sight unseen.

So, instead, you wait until the game has lost momentum, and release a Lite version then — hoping for a second push up the charts.

Here’s the slow decline in ranking of Gameloft’s Modern Combat: Sandstorm game:

When did they release a Lite version? Yep. 7 days ago. Exactly when their game fell off the top 100 paid apps (dark blue line).

No Promo Codes for in-app purchases

Apple offers free promo codes for people to download full versions of apps. This is the primary tool developers have to promote their games with review sites and forums. Without these, it’s going to be harder to convince people to try your game.

Now, I don’t personally care. At TouchArcade, we pretty much buy every game we consider, but for a small time developer, looking to get the word out, this will be a major handicap.

Charts Matter

The next thing is that the Top 100 lists matter. They drive a ton of sales. Are you better off competing for a spot on the top 100 Free apps or the top 100 paid apps? I’m not sure what the answer is, but top 100 free requires some insane volume of downloads. Most people have focused on the marketing to the Top 100 paid. I’m not sure what drives sales into the Top 100 free, and most developers probably don’t either.

This also makes it strange to release both Full and Lite + DLC versions, in that you are splitting your sales across two apps. Maybe it’s not going to be a big deal, but this is uncharted waters.

Now, Apple has gotten Ngmoco to take the plunge and offer Rolando 2 as a free + DLC game. And a game like Eliminate is a natural fit for this plan.

But, unless there are some real success stories from smaller devs, I’m not sure how much this will affect most developer’s short term plans.

Years ago, Apple published a developer magazine. I don’t even remember the name of it, but it covered various topics on programming on the Mac or Apple II, but it would also occasionally have humor articles. One in particular stuck with me.

The author said that when you are getting ready to start developing your application, the single most important thing to do is you need to develop a killer icon. The desktop icon could make or break your application and it really should be your first priority.

As humorous a suggestion as it was, I think what I found most amusing was that there was a slight bit of truth to it… or at least it didn’t come from that ridiculous a place in the mind of the developer.

As much as this was a big joke for Mac applications, I think it’s a pretty accurate view of the importance of App Store icons. I’ve often been asked my opinion why certain games seem to just take off in the App Store. Some seemingly simple games just seem to rocket to the top. What could it be?

While the type of game is certainly important, it seems pretty clear that a good icon and a good screenshot are the main impact you have on casual App Store shoppers.

The same question can be asked of what causes an app to skyrocket to the top 10 when featured by Apple? Apple is basically giving you an itty bitty banner ad in the most trafficked area of iTunes and your icon is what represents your app. It seems obvious this is going to make a difference in attracting potential customers.

These suspicions were corroborated by one small focus group study of iPhone usage published late last year. Comments by this small group of individuals indicated that icon design was pretty important in deciding what app to get:

I think that many developers have already realized the importance of their icon but are they really looking at it as scientifically as they could?

I’d think that a really serious iPhone developer would spend time working on a variety of icon designs and try to figure out which has the highest click through rate when lumped on a page with other icons.

These sort of A/B testing trials are done all the time with regular banner ads. Click through rates can vary substantially between different banner designs. And the most clickable designs aren’t always immediately obvious. For example, color choices alone can make a big difference in banner ads click through rates. And when dealing with featured App Store positioning, I’d think that a small percentage increase in click through rates could make a substantial difference in sales.

I’m not sure where such an experiment could take place, but it does raise some interesting possibilities.

Well, it’s only 3 months later, and they have a top 10 iPhone app (and climbing) with Harbor Master [$0.99]. The game is currently sitting in the #6 spot of all paid iPhone apps. Now, I haven’t seen top 10 sales numbers lately, but I’ve heard the numbers have been increasing, so I’d guess they may be up to 10,000 (~$7000) downloads a day. The game seems to have sold well from the start, but Apple’s also currently featuring Harbor Master in their “What’s Hot” listing. Of course, those listings tend to only last a week or so, but from what I’ve seen games that really take off with the exposure don’t tend to drop off sharply when the listing goes away.

Hopefully, their success will sustain, but even if only for a short time, they’ve certainly proven that they have made the right decision. I don’t know the details of their development cycle and marketing, but would Harbor Master‘s success have happened the same way if Natalia hadn’t quit her day job to devote her time to Imangi? I’d wager not.

One good thing to note is that the economic conditions seems to have had no major effect on online ad revenues. It’s always hard to tell on a month to month basis due to seasonal variation, but our year-to-year numbers have been up. IAB claims across the board numbers are down 5% in Q1 2009, but that seems a marginal decline when there were predictions of 50% drops by some. In fact, one of the biggest doom-sayers, Nick Denton of Gawker Media, reports that their revenues were up 35% year over year. Anecdotal reports I’ve heard from other publishers have reflected the same experiences. While there may be more declines to come… so far, so good.

The growth of TouchArcade.com has been remarkable, and is the primary reason my time has been so occupied this past year. Keeping track of App Store releases really is a more than full time job. The time I’ve had to put into it has reduced the time I have had for MacRumors improvements and AppShopper feature progression. It also put on hold any other grand projects I might have had. That said, its success is not something I can complain about. I suppose I’m not entirely surprised that it was able to gain traction, as I feel iPhone gaming is an incredibly addictive topic… but the rapidity of the growth is surprising. In just a year, in both traffic and respect, the site has done more than could have been expected. (I even interviewed Carmack the other week — how crazy is that?)

The major goal of mine over the past year was the outsourcing of more of my work. It’s been a hard transition for me, as I have a lot of personal ownership in my projects — so it’s hard to hand over the “keys” to someone else. Obviously, no one else will do things exactly the way I would, and it’s just a matter of getting used to that. As a result, it’s taken me this long to finally hire the right people. Fortunately, over the past 6-7 months, I’ve managed to hire two people to handle the editorial responsibilities that can be so time consuming, and one person to handle programming. The transition is still ongoing, but I’m really happy with the extra time it should afford me. I may actually be able to keep up with my email now.

Looking forward, I still have progress to make on freeing up more of my time, so I can focus on larger scale issues as well as new projects. I think my difficulity in transitioning editorial responsibilities smoothly has taught me to get others involved at a much earlier stage. So, I’m not planning on ever starting another content site where I would be the primary writer again. And that’s no big loss for me. As a computer science major, it still amazes me that any sort of writing has become a major aspect of my occupation.

We’ll see what the next year holds. I think it will likely include some new hires, some major feature improvements to the sites I already have, and possibly the launch of one or two major new sites. There are a few sites that have been on my todo list for years now, so I’m anxious to get serious work done on them. Unfortunately, it will probably be a number of months before I can get caught up enough to seriously start on them. Next year’s update will be interesting.

Despite my outsider status, it was great community and a very entrepreneurial one. The explosion of the iPhone App Store has really put financial success within the reach of the indie developer. I spent a fair amount of time hanging out with Imangi Studios husband and wife team Keith Shepard and Natalia Luckyanova. Keith had quit from his day job almost a year ago, while his wife has just given notice so they could pursue their iPhone game company full time.

I think it’s a great move, even in this economy. They clearly have a growing business and have the opportunity to do what they love. There is some inherent risk involved, but the lost opportunity of not pursing it is simply too great.

Yet, it still constantly amazes me to read comments by people don’t seem to truly understand the risk/benefit balance in making such a decision, and put too much weight on the “safe” choice (which may not actually be the safe choice).

The biggest success story to date is one of Ethan Nicholas who developed the iPhone game iShoot. iShoot generated Ethan over $200,000 in one week and has since generated over $800,000. Ethan didn’t waste much time in quitting his day job as a programmer. And yet there are even people who have criticized Ethan for quitting his job, suggesting that it was not the “safe” choice.

I think in making that decision, there are a few important factors, and I think Ethan’s choice to quit was by far the “safer” choice. Factors to take into account include:

1. Replaceability of your current job
2. Income of your current job
3. Income of your side job
4. Potential income of your side job
5. Happiness

In Ethan’s case, by staying at his (est. $100,000/year) day-job, he puts at risk his ($800,000/5 month) salary. The potential income for iPhone programming business is even greater and essentially has no limit. Even given the economy, I’d say his job as a programmer is reasonably replaceable. And in the end, he is much happier for the switch. There is also a once-in-a-lifetime opportunity factor in place as well. How many iPhone developers have a successful app? Now’s the time to invest in additional updates and followup games to take advantage of the momentum.

And if you don’t agree with that, would you suggest that someone who is making over $100,000 on their own business to get a 40-hour/week minimum wage ($15,000/year) job in an attempt to add more “safety” to their income? Because it’s essentially the same argument.

Obviously, this is an extreme example, and I suspect I’m preaching to the choir on this blog, but it was a topic that has been on my mind.

Online Ads vs Newspaper Ads

Here’s a promising chart for all online-media folk published by Alley Insider.

Newspaper ads dropping, online ads keep growing… and they it looks like they’ll intersect in a few years. It’s no surprise, but interesting to see in chart form. So, good news for those who depend on online ad revenue.

Blogs vs. Mainstream

Like many, I do vanity-searches on my own name from time to time. One article that I ran across late last year was written by a journalist by the name of Amy Eagleburger. She wrote an article about how the mainstream media has been slow to adopt online and blogs. Nothing particularly groundbreaking but an interesting comment about MacRumors:

One of the many complaints from journalists is that they don’t have time to blog and write stories. So why aren’t newspapers hiring more professional bloggers? MacRumors.com is a blog Dr. Arnold Kim started as a hobby. It was so successful that he gave up his medical career to blog full time. He’s not just a guy in his pajamas but someone with a knack for news gathering. Why did that blog not start at a newspaper? I’ll admit that when I wanted to read about the new iPhone, I went to Kim’s blog before other publications.

That’s the million dollar question. Why wasn’t MacRumors (or any major blog) started by a newspaper? Or another mainstream media source?

In some ways, it seems absurd. Indeed, if you had asked the same question 5 years ago, the answer would have been simple: there’s no money in a “blogs” like MacRumors. In 2009, however, the answer is entirely different. There’s an enormous amount of money in online media which is becoming increasingly dominated by blog-like publications. And as a result, money is now being invested in these markets.

But besides money, however, I think a site like MacRumors succeeded because it was started by someone who was a genuine enthusiast of the topic and not just going for a paycheck. Especially then, there was no incentive for a traditional journalist to stay up late at night to report on the latest news and rumors. Those stories, if deemed news-worthy, would be published the following day. That fact wasn’t lost on the audience either, and MacRumors generated a reputation of frequently being the first source for news and also the place to connect with others.

Of course, there’s a million other reasons why traditional media was slow to adapt. It’s just the nature of the beast. People stick with what they know. Blog-style news simply didn’t fit into their belief system. Meanwhile, those without traditional journalism training just made it up as they went along.

What’s been keeping me busy has been two relatively new sites and also maintaining MacRumors.com. My two new projects have been TouchArcade.com (cofounded with Blake) and AppShopper.com. Both are iPhone/iPod Touch related sites dealing with the many new apps that are coming out.

For anyone who is serious about their websites, you’ll find that you quickly become a stat addict. Traffic stats, referral stats, income stats… they all become the most interesting things in the world. It’s easy to waste yourself away just examining your stats. If you’ve ever sold items on eBay, it’s a bit of the same feeling.

A bit over a year ago I decided to post public numbers about my MacRumors stats. Historically, I’d been very secretive about my traffic numbers. For no particular reason except that most people are secretive about them. I changed my mind at one point, in part due to the example of Gawker’s network of sites. For whatever reason, Nick Denton has always been very transparent about his traffic numbers. In the end, I decided it can only help a site like MacRumors, which tends to get more traffic than respect. In the long run, I think the numbers have helped, in that they’ve been quoted in a number of places including my New York Times article.

So, getting into the new sites, both have been doing remarkable well — in fact, better than I had really hoped so early on.

Here’s TouchArcade.com’s running monthly pageviews:

Going up is always good. This monthly graph gives you a running 30 day total — so the last point on the graph gives you the last 30 days. The page-views per day gives you a better look at this moment in time:

By this graph, it looks like we could approach 3 million pageviews/month in the near future, if the trends hold true.

Now AppShopper’s monthly trend:

It seems less interesting until you realize that we’re talking about 7 million page views/month already. A more interesting graph I think is from when I first “launched” AppShopper back in September (graph is in pageviews/day):

The site went from very little traffic to 100,000-130,000 daily pageviews in an instant. What’s striking about that graph is not that there was a big spike — any major exposure is going to get you a spike — but the “stickiness” of the site is remarkable. Usually there’s a substantial drop off after people hit a site in a big spike like that, but AppShopper retained a remarkable percentage of those people after the first visit. (There was recently a Black Friday spike that wasn’t nearly as sticky, but still showing a solid residual traffic).

Obviously, “stickiness” is one of those factors that will determine the rate of your success or failure. If you are gaining more users than you are losing each day, your traffic is going to grow. Meanwhile, “non-sticky” sites are going to have to keep finding new users, and it will be harder to keep them around.

Obviously an interesting statistic given my recent departure.

The breakdown is as follows (PDF):

- 11%, or more than 35,000 doctors nationwide, said they plan to retire
- 13% said they plan to seek a job in a non-clinical healthcare setting, which would remove them from active patient care
- 20% said they will cut back on patients seen
- 10% said they will work part-time

My account: http://twitter.com/arnoldkim

I’d heard all the commotion about it for some time, but finally decided to join in on the fun. I’m still a relatively sporadic poster of Twitters, but find the conversation interesting and distracting. I think for all the hype about twitter, the descriptions of it never really “sold” it very well.

For my part, the best way to describe is group instant messaging. For the old-timers, it most feels like sitting in an IRC channel all day long.

If you have any interest in topics I post about in this blog, feel free to follow me on Twitter.