Every app business operates using only one of two models – either the Long Tail, or the Flagship. These models can be used to target any type of audience (niche, or the general population), but themselves remain the same. The business model that is best for you and your app depends on your personal goals, such as how you want to spend your time, and what your dreams for your app project are.
The Long Tail
The long tail model is a business model where one producer makes very many apps and promotes their apps inside their other apps (known as cross-promotion). Since there are many apps, each app represents an opportunity to get more money from one person. For this to work, all the apps must appeal to the same audience base you’re building.
It is predicated on duplicating what become popular already over and over, and counting on people to buy these copycat or off-brand apps over and over. Each popular app duplicate will be all very similar (or completely the same), with different graphics applied to the app to make it look as if it’s a totally different app.
It is looked down upon by some app developers as not being very dedicated to what you do, – and more about making a quick buck – since it is these kinds of apps which leads to app store overpopulation. Sure, there’s technically more money to be made and you’re technically adding sales, but you’re not really adding anything more to the App Store.
This is the model that made Chad Muerta, a well-known app developer, wealthy from app development. Other examples of this include the multitude of app copies of Flappy Bird, once Flappy Bird became popular on the app store, or the multitude of app copies of Angry Birds.
This model is exactly the opposite of the Long Tail model – you produce one app, and pour all of your effort into this single app. It is the one beautiful app which receives great design, great code, and great marketing. It is the type of business model which makes millionaires.
It’s a respected business model, by and large, and is the one that tech startups use when launching a serious venture. If you are looking to make an entrance into startup culture, this is your best bet.
A business model can have multiple apps and still technically be in this category if each app has it’s own independent codebase, independent website, and independent marketing materials.
The type of business model that is right for you depends on your goals for your company. If you’re looking to have a more reliable income with a lower level of work, targeting a niche market with the long tail will be better for you because you’re competing with fewer people and you stand to make more money per person. If you’re looking for your shot at fame and fortune, the flagship model targeted at the general population (task managers, calendars, chintzy games) is a much better fit.
Many companies started targeting niche markets, and then as they grew expanded their offerings. A great example of this is Google, which started as a search engine and just a search engine, but has evolved into a company which does every conceivable software thing on the planet there is to be done.