Essay

Distribution App: Enterprise Plan and Critical Evaluation

Enterprise plan and critical evaluation for an entrepreneurial idea as a university assignment for a module on enterprise at Birmingham City University.


Contents.

  • Introduction
  • SWOT Analysis
  • Current Market
  • Market Research
  • Market Analysis
  • Marketing Strategy
  • Finance
  • Conclusion 

Introduction.

When I blog, I publish updates across a number of social networking sites to self-promote, and I want to attract an audience in the most effective way possible for these specific sites. However, this can be a time consuming process.

Distribution App is a mobile, tablet, desktop and web-browser application designed to make social media publishing efficient. Once setup, it pushes multimedia content to multiple social network accounts and profiles simultaneously with just a click of a button. The mission of Distribution App is to provide an effective, efficient and reliable platform for its users, and its objectives are:

  • To provide an easy-to-use platform that can be used by everybody with little or no explanation.
  • To provide a singular platform for posting content to multiple social networking sites.
  • To develop a reliable application that retains users trust.
  • To be the number one choice application for publishing to social networks for users.

The way that Distribution App works, is that its users input all the images, video, sound and text they want into individual fields. For example, they will type any hashtags they wish to use into a textbox specifically for hashtags, and then their main image to the featured image field. This way, the application understands what each specific piece of content is, and can then redistribute them all intelligently to all the different social media sites the user is publishing to.

A post to Twitter will include the headline, hashtags, featured image, and a URL, whereas a Facebook status will include summary text, featured image and the URL. Instagram posts will be similar to Twitter, only that the featured image is cropped to a square. Posts to Instagram Stories and Snapchat will just be the featured image, with the URL activated when the audience engages with the post (Appendix 1). 

SWOT Analysis.

  • Strengths:

Distribution App has a clean design, making it simple to use and reliable. It is the only application available that uses its method of distributing content independently to different platforms.

 

  • Weaknesses:

Social networking sites regularly update and develop their sites, by either removing or introducing features, to keep up to date. The application will need to continuously update to keep on top of these changes. Not being able to encourage enough users to purchase use of the application and limiting future development.

 

  • Opportunities:

Use of smart devices, mobile messaging and social media increasing steadily, publishers use of social media increasing. Companies using social media more to reach younger audiences.

 

  • Threats:

Competitor applications have already gained user trust and could expand to included similar/competitive features. Tweetdeck was once an independent company but since acquired by social networking site Twitter.

Current Market.

Similar applications already on the market, including Hootsuite and Tweetdeck, have various limitations. More advanced users may already use custom Content Management Systems (CMS), but these are not easy to set up and can be expensive – not practical for individual users. Tweetdeck, for example, will only allow publishing to multiple Twitter accounts (Twitter: 2017), but not for any other social networking site. Hootsuite, on the other hand, will allow for publishing to a number of different networking sites, but the content is identical (Appendix 2). Some sites, like Instagram, will only save this content as a draft, and need further steps to actually publish content. These two applications, and many other lesser-popular alternatives, don’t have the ability to publish to Snapchat, Instagram Stories, SoundCloud, or YouTube, for example.

Market Research.

I asked a series of questions, in a survey, to understand what potential customers think of the idea behind Distribution App and their feelings towards paying for such product. Responders were asked to read an introduction to the idea before answering any of the questions. The introduction did not feature any suggested prices for the app, or go into specific details in how it worked, but rather outlining the customer journey while using it (Appendix 3).

  • What are your first impressions of Distribution App?

Approximately 77% of responders said they felt the idea was ‘great’, the highest rated answer, with the remainder selecting ‘okay’. The two negative responses were not chosen by any of the responders indicating a generally positive first impression.

  • If the app was available today, would you download it?

55% of responses were ‘absolutely’, the highest possible answer. 44% said they would ‘give it a try’, with no responses counted for ‘maybe’ and ‘no’, further indicating the positive first impression of the app. It appears from this, that the application is interesting and customers are intrigued as to what it would offer them.

  • How useful do you think the app would be?

Responses for this question were counted on a scale from 1-10, with 10 being the most positive. 22% of responses scored the idea 10, 9 and 7, while the remaining 33% scored the idea 8. The average score given by all the responses was 8.5, adding weight to the positive first impressions.

  • Is the application something you would consider paying more for to unlock additional features?

Many applications on the App Store feature ‘in-app purchases’, where the user can buy access to additional features to enhance the use of that app. This is quite common in games, where the user would spend real money in exchange for game currency. Some photo editing apps also use this, where in-app purchases grant access to more sophisticated editing tools on top of basic ones available as standard.

It was interesting to see that 44% of responders to the survey said that they would pay a one-off fee to unlock all features, and 33% said they would instead buy a continuous subscription. In total, 77% of responders said they would consider paying for additional features. The remainder 22% said they would only use the free version of the app, and a forth option to ‘not pay to use the app at all’ was not selected.

With these responses, I would conclude that potential customers would try a free version of the app to see whether it is useful enough to warranty spending money on it. The indication is that a one-off cost would be preferable over a subscription.

  • How much would you be willing to pay for the app, as a one off payment?

Responses were collected as a slider, with the option to select £0 to £40. The average response to this question was £11. The lowest suggested cost was £1, while the highest was £19. There were multiple responses for £9, £10 and £11, indicating a more popular suggested cost.

If this average is an accurate representation of how much people are willing to spend on a app, I would price Distribution at £9.99 as “customers see an odd price as being much cheaper than it actually is in reflection to the nearest round figure”, for example “customers see a price of $4.99 as being closer to four dollars than nearly five dollars” (Boyd and Massy, cited in Garland et al, 1997).

  • In your own words, what are the things you like about the app?

This was an open text box with an unlimited character count to allow responders to comment positively about the idea, and what they liked the most. The first comment made reference to being “user-friendly” and making social media posting “less tedious”. This was echoed by other responders, who commented “no more time wasted copying and pasting bits over Facebook and Twitter” and the app offered a “streamlined process of publishing online”.

  • In your own words, what do you think needs improvement?

To capture the critical comments, I offered the same opportunity to comment, which provided more varied feedback than the positive reactions.

Firstly, one responder suggested that “the price structure puts the app beyond the reach of the casual user” explaining that it is ‘quite expensive’ with ‘no one-off payment tier’. As there were no actual costs given in the introduction, or throughout the survey, it is difficult to judge the tipping point for this reaction, however the general consensus appears to be that this user would prefer a tiered pricing structure, as opposed to a singular option for ‘free’ or ‘paid’.

More technical questions were asked, about the shared content function, like what happens if a headline written for Facebook exceeds the character limit on Twitter, and whether it was possible to schedule posts across different platforms for different times (as opposed to them publishing at the same time). These kinds of question would need further development and testing in order to answer.

In order to gauge how the functions of this application would be received professionally, I spoke to UK Social Media Editor at Buzzfeed, Andy Dangerfield, who currently oversees eleven social media accounts for Buzzfeed UK, including Facebook, Twitter, Instagram, Tumblr, Snapchat and Pinterest.

He said: “We currently just use Tweetdeck to publish to multiple Twitter sites. We also have internal software to publish video to YouTube and Facebook and I expect this will incorporate more platforms in the future.”

When asked if there are times it would be easier, or more efficient, to post to each site separately, he said: “A lot of the time as different stories are more suited to certain platforms, different treatments of stories are targeted at specific platforms and different promo techniques work better on different platforms. We’d cover the same story on a large number of platforms at the same time – for example the Brexit and US election results, or a breaking news story, but our treatments are nearly always different for each platform so it’s often easier to publish on each platform individually.”

“I suppose the cases where we might want to publish to more than one platform simultaneously would be for video, for example when using Twitter, Facebook, Instagram and YouTube. If there was a way to publish Instagram Stories and Snapchat Stories at the same time that would be very helpful!”

Market Analysis.

I have identified four core user groups, they are: individuals for social use, individuals for professional use, small to medium sized businesses, and medium to large sized businesses’ marketing departments.

Group

Examples

What their needs are

What Distribution App offers them

Individuals, for social use. Fan pages. Publish easily to multiple fan sites (Instagram, Twitter etc). Access to easily share content to different pages at once.
Individuals, for professional use. Journalists, commentators, and politicians. Quick access to social networking sites for breaking news stories or updates. The ability to post news-in-briefs, or to promote a news story to their personal audience.
Bloggers. Early publish material across social networking sites. A way to easily share promotional material to all their different audiences.
Small to medium sized businesses. Start-ups, independent food and drink outlets, pop-up stores. Time to develop their own business; a quick and easy solution to self-promote on social networking sites. Access to different social networking sites at the same time.
Medium to large sized businesses. Marketing/social media departments. Product launches, or events, where simultaneous campaigns should start at the same time. Ability to share content at the same time, often set up in advance. Scheduling uniform posts for certain times, easily and efficiently.

Marketing Strategy.

To best market the application, consistent and qualitative publishing to the social networking sites supported by the application is a first. This way potential users can see the application put to use, as this content will work as not just a self-promotion tool, but also a home to example work.

Social networking site Facebook, for example, uses Instagram (Appendix 4) to showcase some of its features and case studies, while using Twitter (Appendix 5) for a direct method of communication for support and queries. Twitter can be used for brand promotion too; competitor TweetDeck showcase multiple features, similarly to Apple Support’s Twitter page (Appendix 6), although Apple Support is also open to direct customer enquiries similar to Facebook.

Public facing support pages can be used for brand promotion too: a brand that is seen to be good at engaging with its users when things go wrong can have more impact than the actual issue being reported.

For Distribution App, both showcasing its own processes of multi-platform publishing and being accessible for support is going to be important. For networking sites like Instagram, Snapchat, Tumblr, SoundCloud, YouTube and Facebook, the main objective will be self-promotion. These sites have likes and comments at the heart of their ethos, with the ability to share on. It would make sense to follow other brands on Twitter in creating two separate accounts; one main account for brand promotion and an official voice for the brand, and a secondary account for support.

Targeted advertising campaigns would be run in plenty of time to big events, aiming to attract users who might find the app useful during such event. For example, creating a targeted advert on Facebook for fans of Formula One (Appendix 7) related pages in the lead up to the new Formula One championship season, or targeting people interested in politics ahead of a general election, or other national vote. By doing this, Distributing App creates a call-to-action, giving a prompt for potential users to download the application to ‘give it a try’, as suggested would be done through the market research. If the application is true to its objectives, this should prompt a purchase and continued use of Distribution App.

Social Networking Sites

Purpose

Method

Live Examples

Facebook Page. Brand Promotion. Status updates with working examples of using Distribution App. GoPro, DVLA, The White House,
Targeted adverts close to events potential users would find Distribution App beneficial for.
Twitter. Brand Promotion. Tweets with working examples of using Distribution App. GroPro, Apple, DVLA, The White House,
Targeted adverts close to events potential users would find Distribution App beneficial for.
Support. Quick response to users nagging with Distribution App with technical/support queries. Apple Support, GoPro (main account),
Instagram. Brand Promotion. Shared images with working examples of using Distribution App. GoPro, rodemic, edelkrone, NASA, The White House,
Tumblr. Brand Promotion. Posts with working examples of using Distribution App. GoPro, NASA, The White House,
YouTube. Brand Promotion. Videos with working examples of using Distribution App. Canon UK, GoPro, The White House,
Tips/tricks and how-to guides for use on Support Twitter account, and brand Promotion pages. Canon UK, DVLA,

Finance.

Developing an application from scratch isn’t cheap, especially if it is to work on multiple platforms. Distribution App is designed to be as efficient to its users as possible, and so cross-platform use is necessary to achieve this.

Joseph Entenman, the Business Development Coordinator for developer company Fueled, gave me some insight into producing an app with his company. During a discussion, he said: “Typically, Fueled aims to get a v1.0 out in 6 – 10 weeks at the $150k (£125k) mark per platform”, but notes that these costs will increase if development or design takes longer. Joseph also explains that some complex applications can be closer to the $500k (£400k) mark, and any update beyond the original brief, a v2.0, would be considered a separate project.

He does say, however, to ‘take these figures with a pinch of salt’. Why? Because there’s no definitive answer. There are many variables when building an application, based on number of features and how easily they can be built reliably, whether the app has to integrate with external systems, how many platforms it is built for, whether the user interface customisable, etc.

Ryan Matzner, Fueled’s co-founder, explained in a blog post that “a development team is sort of like a Broadway play. You have the actors on stage, but then there’s a whole bunch of stuff happening behind the scenes. An app that gets built properly is sort of similar.” (Matzner, cited in Hurd, 2016).

Costs of making an application don’t stop at development and design, as publishing apps incurs charges with the individual app stores. Apple’s App Store requires a $99 (£79) annual developer membership (Apple: 2017), as well as 30% from any profits gained from selling the app or in-app purchases. The Google Play Store has a $25 (£20) one-time fee (Google: 2017), but the same 30% take from profits. For Distribution App, basing the full-app purchase price at £9.99 from the market research, profit would only be £6.99 when hosting on either store. The web-browser version, however, would not incur such profit loss as it would be sold independently. Priced at £9.99 in the UK, use of the mobile application would need to be paid for by approximately 18,000 individuals per platform in order to break even. For web, however, this number is just 12,500.

Platform

Cost to buy

% Fees

Profit

Purchases needed to break-even per version

iOS (iPhone/iPad): £9.99 30% £6.99 17,882
macOS: £9.99 30% £6.99 17,882
Android: £9.99 30% £6.99 17,882
Web-browser: £9.99 0% £9.99 12,512
66,158 (total)

In conclusion, 66,000 individuals need to pay for the application in order for it to break-even, if there was an even split of purchases across all four platforms. This is only for the first version of the application, should it be simple and easy enough to produce within 6 – 10 weeks.

So will Distribution App be profitable?

With this model, not for very long. Should a social networking site change the way it works, or add new features, Distribution App will need to update in order to keep up with its own game. The knock on effect of this, is that for every application update, the application would need to expand the number of paying users in order to stay profitable, as its current paid users will have already paid. Since users will not want to spend £9.99 when they download the app to different platforms, the payment will upgrade the users account (for example: Spotify Premium, YouTube Red) for additional app access/use.

Alternatively, an annual subscription for the same amount ensures regular income from those who use the app. The access would be the same as anybody purchasing the app in the original model, only with regular payments.

A working example of this pricing structure for an app already established in the App Store is Peak. It’s an app with games and puzzles designed to exercise your brain. It is free to download initially, but after one warm up exercise the app introduces its ‘pro’ features that come with ‘unlimited access’ (Appendix 8). Peak offers three different payment methods, allowing access to the same level of access. To access the features for a single month, Peak charges £3.99. A 12-month subscription is £2.17 a month, or £26.04 a year. The final method is a ‘lifetime’ one-off payment of £52.99. What Peak does, that can be introduced to Distribution App, is give the option to subscribe or pay in full, as well as allowing simple and limited access to the app for free. In Peak’s case, free content is limited to half-a-dozen of its 40+ games, and doesn’t feature in-depth analytics and other features (Appendix 8.1-8.8). For Distribution App, payment would introduce unlimited access to photo and video sharing, scheduled posts, and more, meaning free use would be limited to sharing text-only updates across a small number of different social media platforms.

The responses in the market research show that potential users rather a one-off payment as opposed to a subscription of any sort, showing understanding for paying for a service but wishing to pay only once for it. The balance, however, lies with the developers who need to meet the expectation that the app will continue to work after a year, as social networking sites develop, and need the continuous financial support that a subscription brings. For Peak, the continuous subscriptions and higher priced ‘lifetime’ access, developers can continue to keep their app more relevant, and up-to-date with new content and features.

One benefit for users of having the subscription based access, is periodic use of the application. If a user doesn’t want to use the application all of the time, but instead for a couple of weeks at a time, a subscription may appear more cost effective, although there would be a time where the lifetime purchase would become the same price as what was spent on a subscription. The addition of the Limited Access Plus model also provides a cheaper, simpler, solution to the individual social users, who’s needs stretch to just some of the extended features.

Tier

Limited Access

Limited Access Plus

Unlimited Access

Unlimited Access

Cost: Free £9.99 £2.99 £49.99
Duration: Default Lifetime One month Lifetime
Text Sharing:
Image Sharing:
 Video/Audio Sharing:  ✓
 Scheduled Posts:  ✓
 Engagement*:  ✓
 Group A*:  ✓  ✓  ✓
 Group B*:  ✓  ✓
 Group C*:  ✓

Engagement: See analytics, and see/reply to post comments.

Group A Networking Sites: Facebook, Twitter, LinkedIn, and Tumblr.

Group B Networking Sites: Instagram (post and stories), and Snapchat.

Group C Networking Sites: SoundCloud, YouTube, and all others.


There are different routes an entrepreneur can take in order to raise funds to build a mobile application. However, “Many entrepreneurs mistakenly assume that investors will be interested in investing in their mobile app at the idea stage. What they fail to understand is that ideas, or great ideas, don’t mean anything unless they’re validated by customer orders or downloads” (Varshneya, 2014). To get the foot in the door, and for the first version of an app, entrepreneurs may start off with funds gathered from savings, friends and family, or through personal or small business loans. The government can also lend a hand with start-up loans, but these only range between £500-£25,000 (GOV, 2016) which alone would not be enough to complete a reliable first version for Distribution App. The government do, however, offer more of a lending hand through Better Business Finance, offering finance and mentorship to new businesses. A search on its ‘find finance’ page found 43 options that meet the criteria for what Distribution App is looking for (Better Business Finance, 2017) (Appendix 9).

Some entrepreneurs have also taken a crowd-funded approach to app development through sites like Kickstarter. An example of this is ‘Elite: Dangerous’ by David Braben, a computer game that has been pledged over £1.5m for development. It set up multiple pledge amounts, each with different rewards for its users (Braben, 2016). The downside to this method, is that in return for pledging money to the project, supporters would receive something in return, whether it be free access to the product or additional goods/services that would then result in further expenses. Kickstarter claim that there is a 35% success rate on their ideas, with the majority of successes raising between $1,000-$20,000 (£810-£16,200) (Kickstarter, 2017).

Conclusion.

To conclude the findings in my research around this specific entrepreneurial idea, I believe it will be well received by its target audience. The biggest opportunity it will have is to continuously reach out to new customers to stay profitable, which is also the apps biggest challenge. The existing competition has already gained market trust on an international level, and Distribution App would have to be absolutely reliable at first use in order to compete. The second biggest challenge, and chronologically the first it would encounter, is sourcing enough funds to develop the application successfully in the first place without compromising the reliability needed to retain customers on the first version. The other challenge worth mentioning is the pace in which social networking sites change, as “Facebook introduces new features all the time, and slowly rolls them out to users. It’s difficult to keep up with all the changes” (Patkar, 2015).

Based on the successes of Peak, and its business model, and the drive to use social media as a platform for publishers, Distribution App would be an immediate success. But more research needs to be carried out in order to establish its long-term viability and neediness.

Bibliography.

Appendix.

  • [Appendix 1] Introduction to Distribution App. [online video] Available at: https://videopress.com/v/wXzTuZ96
  • [Appendix 2] Screenshot of Hootsuite. [image]
  • [Appendix 3] Distribution App market research introduction. [online survey] Available at: https://www.surveymonkey.co.uk/r/YH2NRBQ
  • [Appendix 4] Screenshot of Instagram, showing Facebook’s brand promotion page. [image]
  • [Appendix 5] Screenshot of Twitter, showing Facebook’s support page. [image]
  • [Appendix 6] Screenshot of Twitter, showing Apple Support’s support page. [image]
  • [Appendix 7] Screenshot of Facebook, showing targeted advertisements. [image]
  • [Appendix 8] Screenshot of Peak displaying offer to purchase premium content. [image]
    • [Appendix 8.1] Screenshot of Peak, in-depth insights. [image]
    • [Appendix 8.2] Screenshot of Peak, unlock all workouts. [image]
    • [Appendix 8.3] Screenshot of Peak, unlimited replays. [image]
    • [Appendix 8.4] Screenshot of Peak, upgrade to pro. [image]
    • [Appendix 8.5] Screenshot of Peak, payment policy. [image]
    • [Appendix 8.6] Screenshot of Peak, social networking offer. [image]
    • [Appendix 8.7] Screenshot of Peak, pro-only games. [image]
    • [Appendix 8.8] Screenshot of Peak, daily games. [image]
  • [Appendix 9] Screenshot of Better Business Finance search results. [image]

Image Attachments.