TL;DR: if you enjoy using AppRaisin, nothing is changing for you. Just don’t expect updates as frequently as before. The details below cover the project from its inception to this day with some details and analysis.

In late July of 2015 I’ve produced a 5 page document describing the concept of what is now known as AppRaisin. Here’s how it was described in that doc:

Project [redacted] is a mobile-first (mobile-only initially) user generated and ranked app news service modeled on the concept behind Digg, Reddit, Hacker News, Product Hunt and the likes. Users submit apps and games that were released or updated recently and other users up-vote the apps they like. The project is targeting Windows 10 Desktop and Mobile initially.

First sketch of AppRaisin concept from July 2015

And that’s essentially what it is today. Over the month of August we’ve crystalized the concept and assembled a 3 person team (plus some contractors) and by mid-September started the development.

Version 1.0 went live on November 17th, 2015 on Windows 10 (both desktop and mobile) to universal acclaim from the community.

12 months and 12 feature updates later we had to make a difficult decision to shift active development efforts to other projects. AppRaisin is not going anywhere. We will run and support it for as long as it provides value to the community and doesn’t cost us an arm and a leg. However, we decided not to treat it as a potential money-maker for us anymore and rather focus on providing a great resource to Windows enthusiast community at a reasonably minimal cost to us.

Below is my attempt to analyze the progress, successes, mistakes and hurdles we encountered through this year. Hopefully this helps other app developers, entrepreneurs, ecosystem owners and anyone who’s interested in the app business.

Used and loved

Monthly active users

AppRaisin has been out for close to 9 months now and enjoyed a continuous growth of monthly active users. With one exception, that only makes it more real.

It has a ~40% Day-28 retention rate. Which is literally off-the-charts compared to industry averages for iOS and Android.

It is rated 4.8* globally in the Windows Store and universally praised by the industry media as a must-have Windows 10 app.

What’s wrong then?

Everything above sounds “rosy” but there’s one big caveat though — neither the baseline MAU nor MAU growth is where we need it to be to make a business out of it.

Initial goals for AppRaisin

Our plan was to have 100,000 monthly active users by the end of this year and various “napkin” revenue projections were based on that number.

As of early August we have a little under 25,000 monthly active users and adding 1–2 thousands every month. It is obvious, that unless we find a way to achieve a sudden explosion in growth, there’s no way we are going to get anywhere near our goals any time soon. And we are out of ideas to make that explosion happen.

On the surface this looks like a simple miscalculation on my part. And in a way it is. But like everything in life it’s not that simple. There were a lot of factors both under and beyond our control that influenced the results so far. I will try to cover and analyze the most important of them below.

What went wrong?

Quite a few points below will look like I’m assigning blame (primarily on Microsoft). And, on the one hand, I am. I am convinced that a lot of things they said and did (or in many cases didn’t do) affected a lot of Windows developers dramatically. But at the end of the day, I only have myself to blame — either for making genuine mistakes or believing “corporate talk” and failing to read between the lines.

Windows 10 Mobile “strategy”

The biggest tax on our numbers comes from Microsoft’s “strategy” around Windows 10 Mobile. I put “strategy” in quotes because there either isn’t one or it is so deep and “forward-looking” that I fail to understand it.

This is were our experience with Windows and Windows Phone was supposed to help us plan better. We’ve known from experience that despite massive numbers of Windows PCs in the world, there’s relatively little activity in the Windows Store on the desktops. This was supposed to change with Windows 10 with windowed store apps and whatnot. But we knew better than to rely on that.

Our projections and our launch date were primarily aimed at mobile. We were operating under 2 primary assumptions:

Windows 10 Mobile will launch in November 2015 (December at worst) Windows 10 Mobile update will be available to all Windows Phone 8.1 users

While I’m not sure if the first assumption was based on any clear statements from Microsoft (probably not) it was definitely rooted in common sense. And in a very perverted way that’s what actually happened — first Windows 10 Mobile devices went on sale in November. But it took until March 2016 for upgrades to start rolling out. Which brings us to the second and way more important point.

At the unveiling of Windows 10 in January 2015 Terry Myerson said (emphasis mine):

We will also be making available a free upgrade to Windows 10 to ALL devices running Windows Phone 8.1

You can hear and see it on video at around 14 minutes mark.

Over time there were murmurs here and there that maybe only Lumias will get the update, or maybe only the phones with 1GB+ of RAM, or it will be up to mobile operators to allow or disallow the update and so on. But it took Microsoft until the final announcement of the release itself (in March 2016!) to unveil the list of the phones getting it.

Not only the most popular Windows Phone at the time (Lumia 520) wasn’t getting it, neither were the flagships of the Windows Phone 8.0 era (with one exception of Lumia 1520). On the surface it meant this:

Half of the Windows Phone in use are not upgradable to Windows 10 Mobile

Half of the Windows Phones in use can’t get Windows 10! Which looks bad, but not as bad as another important caveat…

As of today the upgrade was never released through a standard upgrade mechanism — users have to proactively download a special app to trigger the upgrade. Obviously none of the regular smartphone users have ever heard about it. As a result this is what we have today:

Windows 10 Mobile is at ~15% of its initially promised install base

As you can see, Windows 10 Mobile could’ve been on almost 7x more (!) devices than it is today (even if we don’t count 8.0 phones that technically can go to 8.1 and then 10). And that without even accounting for pretty much shut down and abandoned Lumia line. Which is another angle of this same story…

But why am I focusing on mobile so much? After all AppRaisin is a universal app available on both desktop and mobile. And Windows 10 is doing pretty well on the desktop with ~350 million install base.

The thing is that despite UWP being a big improvement to a modern app platform the Windows Store desktop app usage doesn’t look to be there. Not yet at least.

80% of AppRaisin usage is happening on mobile

Despite being a totally universal app and while not marketed specifically to mobile users, 4 out of 5 AppRaisin’s daily active users are on mobile. And that number is only increasing towards mobile domination.

Looking at our numbers from this perspective we have around 20,000 monthly active users on a platform that was underdelivered to its modest potential to the tune of 7:1. Meaning that in the alternative universe where Microsoft kept its promise to upgrade all Windows Phone 8.1 devices to Windows 10, we could have had close to 150,000 MAU with the same effort.

Obviously, this is all fantasies and wishful thinking, but there’s no doubt that even in moderate estimations all of this cost us multiples of our current user base.

You don’t have to go far from Microsoft itself to see a similar failure of overpromising and underdelivering in terms of Windows 10 penetration. The failure and shutdown of Microsoft’s own Lionhead Studios and its ill-fated Fable Legends game is in part attributed to the same issues:

“Let’s be honest — we make our projections based on a series of assumptions,” reflects a former employee who worked closely with Microsoft. “There are supposed to be 2x as many Xboxes out there as there are right now. There are supposed to be 2x as many Windows 10 installs as there currently are. So now, when we look at how much money Legends could make in the free-to-play universe, you have to halve it. Because we can only reach half the audience that was projected.”

I could go on and on about this. But after all it affected everyone who decided to bet on UWP for a greenfield project in 2015 equally. There isn’t much specific to our case in this whole Windows 10 Mobile debacle. So, let’s move on to more specific subjects.

Unwanted on the platform

A part of our go-to-market plan was getting featured by the Windows Store. You can never be sure about things like that, but in 2015 it felt like we had a very good chance of being there. Especially if we release in time for Windows 10 Mobile launch. And that was probably my biggest personal mistake.

My thinking was:

We’ve built a high quality UWP app (and Windows team was all about UWP apps at the time); The app encourages people to download more apps — good for the platform; And we have an unfair advantage of having good relationships with multiple teams and people inside Microsoft.

Still seems reasonable to me. But I didn’t account for one important caveat.

I was in Redmond in early November (few weeks before our launch) and demoed AppRaisin to a bunch of Microsoft employees among others. Everyone seemed to like it, but when I tried to discuss possibilities of being featured, their facial expressions changed. The responses ranged from “Hmm. I’m not sure they would want to feature you” to “No chance in hell they would ever feature you”. The reason? As far as I understand, and as insane as it may sound the first time you hear it:

Microsoft wants to control Windows Store app merchandising.

Once you think about it for a bit, it makes a little more sense. But still, I don’t think at this point in time Windows Store is in a state when worrying about partially losing control of app merchandising should be on anyone’s agenda. But apparently it is.

So over the 9 months in the Store AppRaisin wasn’t featured a single time. Not even in some obscure region or deep in a category tree.

But that’s not the end of our “problems” with the Store. After the release we started paying attention to the “New and rising” list in the store, hoping to see AppRaisin there any day now. But days, weeks and months went by and it didn’t appear on the list. Neither in the global list nor in the category list. Nor did it appear in “Top free” and “Top rated” list in the category.

At first we tried to be humble and explain this naturally — it’s possible that we have fewer downloads than all the other apps on the “top” list (even though it became harder and harder to believe as time went by) and maybe there was a total number of ratings cut-off for the “top rated” list. That last uncertainty prompted me to contact Microsoft about this. After all we clearly had better ratings than most apps on the “Top rated” list and we weren’t there.

Side note: “New and rising” list is a subject for a separate conversation which was already covered with some worrying details by Matt Lacey.

The first response from Microsoft was just that — your numbers are just not there yet, to be on any of the top lists. However, when I pointed out that AppRaisin, at the very least, should clearly be on the “Top rated” list in the category, I guess, it prompted further investigation, which didn’t produce any feedback to us until few months later.

But, after all, being on the “top” list in the category is a pretty meaningless achievement since, most likely, nobody is looking there. So, we decided to let it go for now and focus on more pressing issues.

Months later (at BUILD) I was told that there’s a real explanation for the phenomenon: Microsoft has “stop lists” for apps that are OK to be in the store, but not OK to be on any of the top lists. This list includes, as far as I remember, apps with questionable “legality”, apps that are primarily used to violate copyright (eg. Torrent clients), apps with “sexier” than some vague norm content, and… wait for it… apps that promote other apps as a primary feature.

So, we were on that “no fly” list. I’ve met developers of Torrex — a very popular torrent client — who had the same problem. And, bizarrely, developers of a perfectly innocent game who had a warrior(!) lady with larger than average [covered] breasts on one of the screenshots. While developers of a Torrent client could suspect that they are penalized in some way, and, even we, knowing that Microsoft won’t feature us, could expect other repercussions, but how is a developer of a perfectly normal game supposed to know that one of their screenshots has been internally tagged as “too spicy”, is beyond me.

Luckily the three of us have raised the issue at Build at a relatively high level and, at the very least, some internal conversations about changing this practice happened. AppRaisin appeared very deep on the “Top free” list in the category. I have a suspicion that it still should be higher, but the algorithm is not public, so who knows. It still isn’t on the “Top rated” list even though it is rated higher than #1 and most other apps on that list. Since apps clearly aren’t linearly sorted by rating on that list, it’s hard to say if there are objective factors resulting in AppRaisin not being there or if we are still filtered out.

But after all, who cares about those lists? While we hoped to get some minor boost from the global “New and rising” list in early days, we definitely never considered that we can beat Facebooks and Netflixs of the world to be on the global top lists. So it wasn’t a big part of our user acquisition strategy…

Paid user acquisition woes

We haven’t planned to constantly “buy” users as free-to-play giants do, but I set aside $5,000 to jumpstart the app at launch.

Disclaimer: while I’m trying to be as objective as possible in this section, it is important to note that I’m a CEO of AdDuplex which is mentioned a number of times here.

Paid user acquisition experiments

While we’ve wasted a few hundred dollars trying to advertise on “generic” platforms such as AdWords and Facebook’s “regular” ads, we have managed to spend less than $100 on meaningful paid UA. Obviously this comes with a caveat that we didn’t have to pay for advertising on our own network, but we had to underbid actual customers, so our ads don’t interfere with their campaigns, which affected the number of potential users we could reach.

The reality is this: to get Windows 10 users via in-app advertising you pretty much have only 2 options — Microsoft’s own Dev Center aka “Promote your app”, and AdDuplex. While both can do quite well on relatively limited budgets, neither can produce the scale if you want to get thousands or tens of thousands of downloads a day.

That’s why you can often hear that lifetime value of a Windows customer is better than Android, but you don’t see big F2P names actively pursuing those customers. There’s just no place for them to work within their business model scheme at scale: put $1 in user acquisition, get $2 back, repeat.

This creates a chicken-and-egg like problem in the Windows ecosystem — on one hand you have advertisers with no place to spend their budgets, on the other you have app developers struggling to monetize with ads. But that’s another story.

A couple of tips

500 is not a hard limit

Ever since “Promote your app” feature was launched on Dev Center there was a limit of $500 (now the currency is localized) per month(!). This is an insanely small number for anyone who wants to do actual paid user acquisition. You can easily work around it by creating multiple campaigns with the same budget, but the whole look of it gives you an impression that this is all that they can deliver. And in our launch experiment we weren’t even able to get that.

Few months later, though, it came up in a conversation at Build and I was assured that this limit was imposed by someone managing risk and can be easily lifted by contacting support. So keep that in mind.

Facebook Audience Network is supposedly coming to Windows at some point. At least it was announced at Build. But if you’ve read to this point you, probably, realize that I take these promises with more and more salt. But keep an eye on it in any case.

And, obviously, if you want to promote your apps and games on Windows, contact us at sales@adduplex.com to discuss the opportunities.

Non-scalable unit economics

After the situation with Windows 10 Mobile upgrade materialized into what it is today (in March) it became clear that we are unlikely to “explode” organically. So we started evaluating other growth options and opportunities in porting AppRaisin to other platforms.

At this point it would probably make sense to explain what the business model behind AppRaisin is. We have 2 organic lists of app news: Rising (top upvoted news with “gravity”) and Latest (well, latest news in reverse chronological order). And then there’s a third list called Spotlight. Spotlight includes around 10 featured or sponsored news. News from Spotlight are also rotated in the second spot of the organic lists (clearly marked as such).

Looking from the pure free-to-play type economy our model is the most straight-forward of them all in terms of scaling — we sell downloads of other apps by the users who downloaded our app. So what we need to achieve is generate more “outgoing” downloads than we get “incoming” ones. Since we are selling and buying the same thing we can assume that a unit price is pretty much the same on both ends. If we manage to do that on a current scale then it becomes a pure problem of figuring where to “buy” more users.

I’d be lying if I said that we have ever thought about AppRaisin in these terms. Our goal was to grow it organically and through earned media and word-of-mouth. It took a couple of conversations with F2P gurus a few months ago to make me look at it in these terms.

Unfortunately, in our current setup the math doesn’t work out. We have tried to move a couple of variables around, like showing more of the Spotlight items lower on the organic lists, etc., but we couldn’t make it work as it is. So, it became clear that without major changes we won’t be able to scale AppRaisin through brute force, aka money.

We could initiate major changes and try to work our way into positive unit economics, but there’s no telling of whether we would eventually get there and how long it would take. We decided against pursuing this route. At least for the foreseeable future.

Key takeaways

These are the main reasons that led us to the decision of halting active development on AppRaisin. Below are a few major takeaways.

Understand platform owner and their motivation

Understanding a huge corporation like Microsoft is not an easy task. To be precise, there’s no such single thing as Microsoft. Every division, sub-division, group, team and even person has their own goals, metrics and interests. You can never expect to account for all of them, but you can try to cover at least the obvious ones.

Was our decision to build AppRaisin for Windows 10 rather than Windows Phone 8.x a mistake? In hindsight the answer is most like yes. However, if it wasn’t for “unmerchantability” of the concept (my failure to understand interests of the Windows Store merchandising team), the opposite would’ve been true. In previous fiscal year (Microsoft’s year starts in July) the core target for most developer/publisher oriented teams was getting as many UWP apps as possible. Non-UWP apps had likely as many chances of getting marketing help from Microsoft as we had with our “unwanted” app.

In other words, it is hard to understand them, but one has to try anyway.

Scaling free software is about unit economics

When starting a new project much of your plans are nothing more than guesswork. Your experience makes your guesswork better, but it doesn’t change it being just a better guesswork anyway. Even if your estimates of the scale you need to be profitable are in the ballpark, how you’ll get to that scale without literally pouring money into it, is even more of a guesswork. Like in our case, when our hopes of getting a lot of merchandising support from Microsoft fell through, we were left with lower than planned baseline user base and no solid plan on how to grow it.

That’s when spending money on user acquisition becomes your best option. Even though there are challenges with that on Windows, as I pointed above, it is something that you can work with. But if your unit economics are negative this option goes away as well.

So, I guess, the takeaway is that even if you have no plans of going into full “buy users — monetize them — repeat” mode it is important to keep an eye on your unit economics metrics from the early days and constantly optimize them.

Bets are bets — they are risky

We made our bet on UWP and Windows 10 and it didn’t workout for now. That’s sad, but it is normal. We failed to grow AppRaisin into a self-sustainable business, but we made a product that is used and loved by the community. We have gained a lot of experience, a part of which I have shared above. And all of it is worth something. It is worth a lot.

So, I’m not sad. I’m actually happy that we’ve helped quite a few developers surface their great apps and games in front of potential users. We’ve helped those users discover their new favorite games and handy apps. We’ve enriched Windows ecosystem with one more great app.

So, what’s next for AppRaisin?

Nothing changes (in both good and bad sense)

For those who enjoy using AppRaisin to discover new Windows apps, keep an eye on your favorites or promote your own creations, nothing changes. Not a member yet? Download AppRaisin from the Windows Store and enjoy!

We will continue running the servers, maintaining the app and moderating the content. Just don’t expect a lot of new features in the near future. Unless…

Want to partner up to move AppRaisin forward?

We have exhausted our resources trying to turn AppRaisin into a standalone self-sustainable business, but it doesn’t mean it can’t become one given more time and under the right stewardship. Or it can serve its purpose under the grander vision that doesn’t require it to be profitable on its own.

In case you represent an entity that has resources and ideas to give AppRaisin new wings, please, don’t hesitate to contact me at alan@adduplex.com and let’s talk!

Need your help to continue as a community project

For now we are switching to running AppRaisin as a community initiative. This means that we will do everything needed to keep it running smoothly but only invest into developing it further if we have nothing better to do, or if we have enough of community support to make things happen.

One such thing that has been planned from the early days but never materialized is having local AppRaisin communities. These communities would be centered around a language and have completely separate news feeds with both local and global app news in the language of the community.

We have a vision and skills to make this happen but, as you have probably guessed, we no longer have a budget. So, we are asking for Windows enthusiast community help. We need around $10,000 to lay the groundwork for the multi-lingual service and launch the first local community. Help us make it happen by pledging support on this AppStretch campaign. Any help counts! Even if you can only afford to share information about this initiative on social networks, please, do so.

Help AppRaisin community grow!

Thank you and let’s continue discovering and building great apps!

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UPDATE: I’ve posted a follow up article covering some questions that you had after reading this post and its coverage elsewhere.

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If you find this post helpful and/or interesting, please, click 💚 below to recommend it to others. Also, make sure to follow my blog here by clicking “follow”. Check out the things I’m working on at AdDuplex, AppRaisin — for apps for your Windows PC, tablet or phone, and AppStretch — to crowdsource and crowdfund your apps and games.