HOW TO MAKE MONEY ON VOICE APPS
There’s a tendency with new technologies to reach back into recent history for situations that parallel the current context, with the aim of finding business approaches that shorten the path to success. Right now many people believe that Voice Apps (VAs) share common ground with mobile applications circa 2008. The thinking is that VAs amount to a new market space with plentiful opportunities to make money. What is required is boldness…according to conventional wisdom … to capture these revenues.
But it has been nearly two-and-a-half years since the first Amazon Echo entered the market (and all of three seconds before the first skill debuted). The market has produced mostly mixed results with its share of winners or losers that fluctuate over time. For example, we have a colleague who documented astounding uptake and stickiness for his skills over six months without earning a dollar. He was drowning in server fees. But a few months later he was the top earner among independent skills developers.
What we’ve come to recognize is that there are two main ways to make money: the Easy Way and the Hard Way.
The EASY WAY is about positioning yourself to develop software for third parties. You do a lot of business development. You cultivate a lot of leads. You put together contracts. You deliver milestone ahead of schedule and under budget. You collect the paychecks and post the testimonials all over your marketing literature. Rinse. Repeat.
With the Easy Way, you take home the paycheck without taking on any risk. You sidestep the whole question of how to deliver value (which retail customers will pay for) with an audio app. Besides investing in high caliber coders, you will need to build brand awareness about your company. All your investments will be in relationships, in gaining access to the best leads, the best opportunities to develop for clients who will pay on time and in full.
Step 1. Business Development
- Beg Amazon, Google, other partners for leads, contacts, contracts, sales.
- Go door-to-door with local businesses or businesses where you already have an “in” to deliver your pitch on how VAs can serve these businesses
- Work your connections among your users, enlist them to tout your skills and expertise
Step 2. Software Development
- Use templates/Keep It Simple to avoid costly mistakes.
- Put on a good show. Use every trick up your sleeve to give your users a good experience.
- Use the menus of options found in Developing Amazon Alexa Games: A Designer’s Guide (2017) and How To Program — Amazon Echo: Design, Development and Testing Alexa Skills (2015).
What to Charge: $5,000-$15,000 per contract, depending on complexity
Advantages:
You do not need to be a master coder to create a template skill. Basic development abilities will be enough to complete the contract. Most skills require very little support or follow up on your part. Best of all, the client handles all the promotion – execution and expenses – leaving you free to do what you do best.
Disadvantages
What is easy to do is also easily copied. You can expect skills that mimic every successful implementation. And these mimics will draw attention away from your client’s skill and reduce the value of what you’re offering. More often than not, you will receive your paycheck from out of your client’s marketing budget. You are part of a campaign that has a finite lifespan. Your client will be monitoring the campaign’s success in anticipation of shifting resources elsewhere, where they will have more impact.
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The HARD WAY is to create a “voice native” skill using IP with commercial value. You will be looking to deliver information or access to services that add to your client’s bottom line. The difficulty lies in the dearth of successful business models. You have nothing to emulate; you need to figure out how to make money for your client while deliver the product that does so. It is like trying to cross the river while building the bridge.
Step 1: Build Something of Value
- Embrace metrics. Set a concrete, measurable goal. Iterate towards that goal. For example, we track all users who play our Six Swords game for more than ten hours.
- Swim Against the Current. Work knowing that Google, Amazon, etc. currently prefer skills or agents to be free. They want to cultivate the network effects which means they are motivated to eliminate all barriers to entry. Therefore, you, as a developer, are swimming against the current in persuading your users to pay money for your work.
Step 2. Cultivate users who value what you’ve built
- Build marketing channels. You need to come up with your own means of user acquisition and capture. You won’t have access to traditional advertising channels which makes getting new users even more difficult.
- Innovate around marketing. You need to find ways to remind your users how much they enjoy your specific application. You can’t encourage users to employ bookmarks or desktop icons to remember your skill or how to invoke it. They don’t exist for skills or agents yet. There are no limits on others using similar names or invocation phrases.
Step 3: Monetize your dedicated users
We suggest trying a multi-pronged approach to monetization. We always start with the Freemium/Premium approach, where users pay to enable services or experiences. Downloadable content can enhance the user experience and sustain user capture. Putting together a collection of merchandise will deliver revenues alongside some free advertising. We also employ in-app advertising and in-app currency. You could try the subscription business model being touted by the platform owners in the hopes that they will take steps to support the service.
Advantages:
With the Hard Way, you have far more control over your options and your opportunities. VCs and banks pay attention to revenue streams and provide capital accordingly. In fueling your own growth, you are operating from a position of strength. Best of all, you are protected from mimics because you’ve invested in complexity. With the Hard Way, you’ve built something that is hard to replicate or be compared to. Your competition will see you as a barrier to entry.
Disadvantages:
No one has yet succeeded using the Hard Way. Amazon and Google are waiting for the first big viral VAs to launch their VAs into commonality. But they do so without having laid much groundwork ahead of time. We’ve begged to buy for advertising that cross-references Alexa users with likely user prospects. We know that the data is available, but it hasn’t yet been incorporated into marketing channels that we can access. Without viable marketing plans, you can look forward to a lot of work for only a limited amount of money.
