Why App Developers Face Such Long Odds

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Why did the app developer move back home with his mom?

Sure, that sounds like the setup for a joke—but for many developers, it’s also reality: despite the much-publicized stories of app-builders and startup founders making millions (or even billions) off the software they’ve built, the substantial majority earn only just enough to get by, according to a new column in the Harvard Business Review.

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“Encouraging kids to blow off schoolwork to write apps, or skip college to become entrepreneurs, is like advising them to take their college money and invest it in PowerBall,” Jerry Davis, Wilbur K. Pierpont professor of management at the Ross School of Business and the editor of Administrative Science Quarterly, wrote in that column. “A few may win big; many or most will end up living with their moms.”

Davis cited a recent article in The New York Times that followed a handful of teenagers who’d created popular apps for Apple’s App Store; while their attempts at entrepreneurship were laudable, their efforts didn’t exactly make them millionaires—Ryan Orbuch, a 16-year-old programmer who helped develop an anti-procrastination app called Finish, ended up splitting $30,000 in revenues with a business partner. And with millions of apps available for Apple’s iOS, Google Android, and BlackBerry (many of them for free), it’s increasingly difficult for an independent developer to even make that much.

Compounding the problem is the fact that some of the hottest companies out there for developers and programmers don’t have nearly enough job openings to absorb the flood of graduates from the world’s universities. Whereas a major corporation of yesteryear might need tens of thousands (or even hundreds of thousands) of employees to fill positions from the factory floor to the corporate boardrooms, even Facebook can get by with a couple thousand, and many hot startups employ only a few dozen.

However, the prospect of becoming the next Mark Zuckerberg or Steve Jobs is just too tantalizing for many people to pass up, even if the chances of wild success are smaller than anyone rational would like to admit. And so developers will continue to toil away at their apps—even if, in order to save costs, it means they need to move home again.

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Comments

  1. BY Braden Talbot says:

    “Encouraging kids to blow off schoolwork to write apps, or skip college to become entrepreneurs, is like advising them to take their college money and invest it in PowerBall.”

    No, it’s not the same. Powerball doesn’t teach you development, people skills, selling, or anything else which might otherwise be required in trying to build profitable apps or companies. He is looking at building a company or app as if there is some Vegas probability attached to it, and as if it is a black and white gamble.

  2. Some people also says that it’s impossible to start a new business in anything. Yet, entrepreneurs become millionaires everyday. Short-minded persons are everywhere, even at Ross School of Business. The author’s premise is wrong: the app world is not and never was said to be the Klondike. It is just harder today to make money with shitty apps because there is more competition.

    It’s all about strategy and creating value. In any area of life and business, there’s going to be winners and losers. Not playing because you can lose is totally stupid.

    By the way, splitting 30,000$ dollars with a business partner at sixteen years is kind of an achievement.

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