In this post, I wanted to do something a little different – a bit of fun mixed with a warning…
Over the last two years I have been building software with AI. I have been doing this pretty much since the day ChatGPT launched. It’s been a wild ride of ups and downs. Sometimes it was great and sometimes it caused issues that took weeks to resolve but, I could see the potential from the start. Literally, within a couple of days of using ChatGPT I was telling friends and family about how it blew my mind and how important it is that they try it out. While LLMs have become more and more popular – I think most people have not been able to see past getting it to tidy up an email or help with an essay. In this post, I want to show why I think it’s far more powerful than most people understand currently in March 2024.
In the video below, I am going to show how in less than an hour, I create an app from an empty folder on my computer without writing a line of code myself. I am obviously a developer who’s been coding since my early teens but, I have already taught 3 or 4 people to do this who have never written a single line of code.
I want to stress this point – you don’t need years of development experience any more.
I taught one friend how to do this process who owns a staffing agency. He wanted to build an internal tool for managing onboarding new team members. He had the first version of the app up and running with days. His team are now saving time with a more robust process that he has full visibility on. This is a significant improvement in operations and it increases the value of the business because there is high value IP which can now be sold with it. He could also consider making it available for others to use with a monthly subscription.
Speaking of startups, another guy I taught how to build iOS apps is now is about to beta launch his app and is using it to raise $1m in investment. Having the ability to build the app having never written a line of code and built anything like this before allows him to refine the idea and get people to play with the ideas and features so potential users and investors can understand his vision for the business. It also lowers his costs dramatically.
So I have seen first hand how people can create apps with no experience that add significant value to their businesses at little to no cost. You don’t have to take my word for it, I will show you what it’s like step by step with this video…
There is a bit of background knowledge needed to get this up and running but, simple to learn with some guidance. But you can see it’s possible. While this is exciting to see what people are going to build – I had a conversation with a friend in the last few days where we realised that it might be hard to sell your software to people who can make their own version in a matter of hours…
I am keen to see how far people can push this new paradigm so I am thinking of doing workshops or a course or… something. I haven’t quite decided yet. Keep an eye out for it.
I’m currently working on launching an iOS app and am ready to start promoting it. Like any new project, my ultimate goal is to build a profitable business. But instead of diving headfirst into spending, I want to ensure that the numbers work in my favor before scaling up. This post is a breakdown of my thought process, early experiments, and what I’ve learned so far about setting targets for a sustainable app business.
Why PPC Is My Starting Point
When it comes to marketing a new app, there are plenty of options: social media, influencer collaborations, SEO, and more. However, I’ve decided to focus on Pay-Per-Click (PPC) advertising as my starting point. Why?
Control: With PPC, I can tightly control who sees my ads, how much I spend, and how I scale campaigns.
Immediate Feedback: PPC delivers quick results. I can start gathering data right away to see what’s working and what isn’t.
Scalability: If the ads are profitable, I can reinvest and scale up.
But to make PPC work, I need to fully understand the metrics that will make or break this business.
Baseline PPC Numbers From My First Test
I’ve already run a small test campaign to establish some baseline numbers. While I’m still optimizing the ads, targeting, and messaging, here’s what I’ve learned:
Cost-Per-Click (CPC): The CPC on my first ads ranged between £0.22 and £0.45, depending on the audience segment.
Conversion Rate: I don’t have reliable conversion data yet because the app is still pending approval on the App Store. However, I’m assuming a 5% conversion rate as a starting point for analysis. (This is optimistic but achievable with good ad creatives and landing page optimization.)
What Metrics Should I Be Targeting?
To make this business work, I need to focus on a few key variables:
Price Per Sale
CPC
Conversion Rate
Apple’s Cut: Apple takes 30% of every app sale, which significantly impacts profitability.
Profitability Analysis: Can This Work?
Cost Per Acquisition (CPA):
CPA = CPC / Conversion Rate
For example, if CPC = £0.30 and the conversion rate = 5%:
CPA = £0.30 / 0.05 = £6
Net Revenue After Apple’s Cut:
Apple takes 30% of the app sale price. For example:
At £9: £9 × 0.7 = £6.30
At £12: £12 × 0.7 = £8.40
At £15: £15 × 0.7 = £10.50
Profit Per Sale:
Profit Per Sale = Net Revenue - CPA
If CPA = £6 and the app price is £9:
Profit Per Sale = £6.30 - £6 = £0.30
Sales and Traffic Requirements for £100,000 Profit:
It seems like I need to get a £12 price point with a conversion rate of 4% or more and a CPC of below £0.30 to really make this business work. Which will be hard but, not impossible. Here are a few tables I played about with that got me here…
Conversion Rate Is Critical: If the conversion rate falls below 3%, this business is unlikely to be profitable. Even at a 5% conversion rate, I need to ensure my CPC stays below £0.30 to make the numbers work.
Higher Price Points Are Better: A price of £15 allows me to reduce the sales volume and traffic requirements compared to £9 or £12 pricing. However, this requires positioning the app as high-value to justify the cost.
Apple’s Cut Hurts Margins: The 30% fee significantly impacts profitability. Factoring this in early has been eye-opening, as it increases the importance of keeping acquisition costs low.
PPC Alone Isn’t Enough: While PPC is a great starting point, I’ll also need organic traffic from platforms like TikTok, Instagram Reels, and YouTube Shorts to reduce dependency on paid ads.
Next Steps
Here’s what I plan to do next:
Optimize Ads and Targeting: Refine ad creatives and audience targeting to lower my CPC.
Prepare for App Store Approval: Ensure the app’s landing page and App Store listing are fully optimized for conversions.
Scale Carefully: Start with a small budget, measure ROI, and reinvest profits to scale.
Test Price Points: Run A/B tests to see how different price points affect conversion rates and overall profitability.
Why This Analysis Matters
This type of detailed profitability analysis has been invaluable in helping me set realistic expectations and targets for my app. It’s easy to get caught up in the excitement of launching and scaling, but without clear metrics, it’s just as easy to spend money without seeing a return.
If you’re building a product or service, I highly recommend taking the time to run the numbers. Even basic models like these can provide clarity and confidence in your decisions.
Closing Thoughts
Launching a business is exciting, but it’s also a numbers game. By starting with PPC and diving into profitability analysis, I’ve gained a much clearer picture of what it will take to make my app a success. Whether or not this exact strategy works, the lessons from this process will guide me in every project I tackle moving forward.
The reality of how my business works. The mechanics of running a remote consulting business. (Detailed)
Working from Oslo, Norway
I am currently in Dubai. I have flown in to see a close friend of mine who left the UK years ago and has recently moved to Dubai. Before I left for the UK I was talking to a prospect for lnks.to, where we eventually got talking about my consulting and how I work while travelling. Then while in the cab on the way to my hotel from the airport, the driver asked about what I do too. I thought it would be worth explaining here because I think others are too vague and I want to explain why I think the mechanics of the business works.
I am trying to share how the business works so this is going to be less of a deep dive into what I actually deliver but more about the processes that allow me to deliver. A more operational take if you will. That being said, I think I should explain a little about how I help clients because there is some important context here.
Who do I help
In the past, I would help small companies with Marketing and Operations. I would create strategies to help them overcome complex problems then help them roll out the strategy. While I have one or two clients that come to me for ad-hoc advice about marketing strategy and operational questions who are more generic companies, this is rare at this point so when I say “clients” for the rest of this post I am talking about Accounting firms.
More specifically, I work with operational leaders; CEO, Head of Operations, Operations, and Practice Managers within small accounting firms, typically with 10-50 staff, sometimes smaller, sometimes larger.
How I help them
In short I help accounting firms build scalable processes. This means working out the most efficient way to deliver the services they charge for or, processes they use to manage the team. (Sexy, I know)
I will typically help them break down how they are doing the service and what they can do to speed things up. Another example is advising what software they can use to make things easier. Then I advise on how to train the team to take on these new processes and systems. In many cases I deliver the training.
In the majority of cases at the moment, the way I am helping practices achieve this by rolling out Karbon which is a workflow management and communication software.
What does “efficiencies” actually mean?
Let me give you an example…
An accounting firm with 20 staff. They deliver payroll and 8 other services for their 300 clients. To keep things simple, lets say, each of these services require the following steps:
Get information / update from the client
Process the information
Internal Review
Client Review
File
Lets say each of the steps takes time but lets just focus on the stages with client interactions. Requesting the information from the client and chasing them until they hand it over. Typically clients ignore the first couple of requests so this can take a little longer than one would hope. Here is how the process might play out in reality:
Get information / update from the client
Initial request: Remembering which client to chase, composing the email – 10mins
Chase 1: Remembering which client to chase, composing the email – 5mins
Chase 2: Remembering which client to chase, composing the email – 5mins
Client Review
Initial request: Remembering which client to chase, composing the email – 10mins
Chase 1: Remembering which client to chase, composing the email – 5mins
Chase 2: Remembering which client to chase, composing the email – 5mins
That is 40 mins in total. Now all team members doing this for all clients…
40mins x 300 clients = 12,000 mins or, 200 hours
200 hours x 8 services = 1,600 hours
An accountant might earn £20 per hour (assuming the London based accountant is on £45k salary). 1,600 hours x £20 per hour = £32,000.
This is a little misleading because some services like Payroll are done monthly and others are done annually like Statutory Accounts but it’s a good starting point. If anything it would be higher.
This means if we can reduce the time chasing clients from 40mins to 10 mins by using automation to request the information then we might be able to make significant savings in time and money because the time would go down to 400 hours. The cost of those 400 hours would be £8,000.
So we might be able to save the firm in this example £24,000 (£32,000 – £8,000).
I help them find and roll out these kinds of “efficiencies” to get more profitable and save time.
How does my consulting business work
Now, let’s take a look at how I find these clients and manage the process. I was going to say “there is more going on behind the scenes” but to be honest, this is pretty much it…
Acquisition
Let’s start with how I get clients. The main “channels” are:
Referrals: Most of my clients are referrals. This is where someone has worked with me in the past or, wants me to help their client roll out the software / manage an implementation.
Outbound emails: I look for firms online and email the leaders of the business asking if “saving money” or “streamlining delivery” would be useful.
If it sounds like they have issues I can help with, we’ll start a brief sales process.
Offers
When someone is interested in working with me, I typically pitch them one of 3 things unless they have come to me for something specific anyway. The offers typically fall into 1 of the following 3:
Sent number of live training / guidance calls, on something very specific (how to use and setup x part of y software)
Implementation package, this where I will train them on how to manage parts of a software while doing some of the setup for them
Rolling out of larger projects, this is where I will analyse the business, make recommendations and then roll those out. These projects take over a year and I would agree to work x days a week (I hardly ever do this post covid, being prevented from working on site during covid then wanting to work remotely meant I have no longer been interested in this kind of work because it largely has to be done in person)
The pricing around these is pretty much set. I don’t really negotiate and the price is stated pretty early on in the conversations.
Package 1: 4 consulting calls at £X
Package 2: Full Implementation £Y
Custom Project: X Days a per week Y weeks, Daily Rate (Minimum of half day)
There are a few people who have access to my calendar, they book in a call and I send the invoice shortly after. I am looking to set this up in lnks.to where they will fill in a form & pay, then that gives them access to the calendly link.
Delivery
Typically, the process of working with me looks like this, regardless of the package:
We make contact, I add the contact to a contact “follow up list” in my CRM (lnks.to)
We book in a call to discuss what the client needs and if I can help (You will often hear me describe this as a Discovery Call) (Calendly > Google Calendar > Zoom + Slides) if there is a fit, I will create an Opportunity in lnks.to to track them through the sales & delivery process)
Propose process & agree timeline (Email or Zoom call followed up by email, update opportunity dashboard)
First payment (Invoice via Zero or lnks.to product page) & Opportunity moved to “delivery steps” in lnks.to)
Live calls, follow up actions (Zoom call, follow up Emails with Google Sheet worksheets / PDFs, Loom videos)
Monthly invoicing (Xero)
Handover any final deliverables (Zoom call, follow up Emails with Google Sheet worksheets / PDFs, Loom videos)
Toolkit
lnks.to / opportunities
lnks.to I have the CRM side of the business in here and I have one or two freebies on this page
Karbon
Xero
Laptop / iPad / iPhone
Loom
Zoom
Calendly
Excel / Google Sheets
In conclusion, it’s probably not the sexist business setup you have ever seen but, it allows me to keep things really streamlined to fit my Ideal Average Day. The main benefits are:
I dictate my hours – clients can book calls regardless of which package works for them but, the hours they can book within are limited in my calendly. For example, I don’t take calls before 10am.
I am location independent – I can run this from anywhere in the world with an internet connection, I just need a laptop or iPad. I will be taking calls while here in Dubai & I have been managing clients from New York, (I blocked my calendar while in Michigan with family), Oslo, Cape Town, London, Lisbon, Brussels…
Easy to manage: Because I track things through a specific funnel and delivery process, I can jump onto anyone one of these calls and know where I am at / what I need to share.
Robust: if any of my devices fail, I can literally buy a new laptop or iPad that day and be up and running within the hour.
Working in New York
It’s taken a lot of experimenting to get here and while it’s simple to me, I get it will be new or sophisticated to many others. That being said, I think it’s possible for many people. Many of you reading this will be familiar with many of the tools I have described (or their competitors). It’s just I have put them together in a particular order around specific packages that I offer. I would encourage you to do something similar. Even if you don’t want to travel while working, knowing you aren’t reliant on one employer for your income and the freedom to control your time during “office hours” is invaluable in my opinion.
If you are interested in learning how you can leverage your knowledge and experience to do something similar, I have created a detailed guide called Remote Revenue, which you can get – here.
Being a hustler is not for everybody. It has some highs and incredible lows.
I once read a tweet or blog post where the writer said every entrprenue they have met has physcological issues. I have to say in my experience this is true. There seems to be something about the torture of running a business, the stress, the inability to accurately estimate risk and even worse – ignoring risk completely for the sake of their world view being correct – lying to themesleves or others.
To give you a few examples of just a few of the people I have met along the way who have stuck to running a business and met dark times…
Sleeping problems
Most of the people I have met who own or run businesses do not sleep well. In some cases it will come up as a passing comment or they will say something stupid like “I am a workaholic”, this is celebrating something that is known to be a form of torture and is linked to mental health issues like depression.
Sickness from stress
I know of one guy who was so sick with stress that his body started to break down and ended up suffering from Diarrhea. Which was a shock because he’s known for living a healthy lifestyle.
Incredibly bad decisions
I know another guy who I haven’t seen for years. In the process of making millions of pounds he broke the law and is now on the run from the FBI and others. I mean literally.
Are you stong enough to look a room full of employees in the eye, knowing you can’t pay them at the end of the month and their rent/ mortgages are at risk?
You do not need a “good idea” and, “follow your passion” is terrible advice.
Your aim is to match a product or service with an audience who want it. This might seem like an obvious thing to say and you might know it already, but when you step back and think about what I am going to tell you in the rest of this book, it should become clearer as to what I am saying.
To illustrate why I want this at the front of your mind – when most people meet someone who they hear is a business person, they ask – what is the person selling? How did they make their money?
What they really should be asking is: “what audience did they match to a specific product and how did they reach them cost effectivly”.
The thing is, even if you are taking the “good idea approach”, you still need to find the customers at some point, and you will have to pay to get in front of them, one way or another.
If you can simply get a list of products that are already for sale with the process of attracting the audience clearly visible, this will tell you a huge amount of what you will have to work out at some point. Jumping straight to it will save you a huge amount of time and effort.
For example, you might sit at home trying to come up with a new concept for working out, this means you will then have to find out who wants to try your concept, you will have to educate them to the value of your concept and you will have to try and convince them to test your concept now.
Alternatively, if you can see the guy on the beach selling ice cream from a truck with a huge queue lining up to buy the ice cream, you will have found demand, product and a solution for getting it to them.
This doesn’t mean you are out of the woods, I have seen many business running but actually losing money on a daily basis, either savings or venture capital.
The Customer Education Problem
From a Funnel Persective
With customer education and outreach
Cold email or ads
educational content
get them to come back
they research multiple options
they decide on the option (might not be you)
Then they buy
Problem already being searched for with intent based keywords
This is simply a game of CAC/ LTV – simplify everything down to this.
Getting this right allows you to flip
Look at Uber, here in the UK the referral fee would be: £10 credit for new user, £10 for the affiliate who referred them
If they used Google ads, it wouldn’t have been as trusted as a referral from a friend
If you end up making 3 rides and they are more than £10, then assuming they make 30%, then they will get that back in 3 trips
They don’t make 30% – Sales tax, driver fee…
So ideally, you want to pay to get a customer once and keep making revenue from them, because it’s normally cheaper than buying new customers
This is why when there is a new customer acquisition channel, while it’s cheap all of the savvy marketers work as hard as they can to milk it while it’s cheap to get people onto mailing lists and keep them engaged
Sending out an email on a mailing service like mailChimp is like £1 / 10,000 emails
When you look at a social media influencer, who has 10,000s followers, they are doing the same as people with a mailing list.
Flipping
buy for £1 and sell for £3
This allows you to buy 3, then make £9
Then you buy 9 and make 27
Which is not totally true, you need to set some money aside for marketing, this means you might only be taking £1 out of the deal
Obviously, you want to be doing this with £100s
So lets compare this with an eBook at £7, you might have a budget of £6 for buying customers
£30 a month, £360 a year, leaving £359 for customer acquisition
If you have a SaaS platform for £300 a month, then that’s £3,600 a year so to put a £1 in your pocket, you can spend £3,599 on customer acquisition
Imagine how shit you can be at marketing, how much room there is for trial and error
There are many things that hold a business back but, the main one I come across when talking to people who are struggling is their product or service.
That’s to say they have invested in a product or service already, but it’s not as profitable as they’d hoped.
This creates a challenge for me. I have to subtly convince them that allocating time and resources to promotion, might not be a great idea. This is because they are struggling to prove that people actually want their product.
To illustrate what they should be trying to achieve with marketing and, more generally in business, I like to use the example of “Alberts Apples”.
