App-etite for Success
College pals Joshua Tucker and Keith Shields didn't know how to build apps, but that didn't stop them from creating a successful app company.
How do you get named the “Coolest College Startup of 2014” by Inc. Magazine? For Joshua Tucker and Keith Shields, cofounders of app creation company Applits, it’s all about thinking big, getting creative and not being afraid to hustle.
Applits got its start two years ago, when Tucker and Shields were college students getting mechanical engineering degrees. “We didn't like mechanical engineering at all,” Tucker says with a laugh. That same year, Facebook bought Instagram for $1 billion. “We thought, ‘This is cool. Apps are huge. What if we could get big communities of users to develop apps and turn them into billion-dollar businesses?’
So they launched a website to solicit app ideas and ask users to vote on the best ones. In exchange for $1,500, Applits would get the rights to develop the idea. Members would earn points as well as revenue for sharing apps after they are launched. There was just one catch: The partners had no idea how to make apps.
Needless to say, they were “really naive about business,” Tucker admits. “We had never started a company. We had to do everything from scratch—we didn't know how to form an LLC or create contracts.” As for the apps, “We both knew a little coding, but it wasn't enough,” Tucker recalls. “Four or five months in, we still weren't sure how to get our apps developed.”
But that didn't stop these Smart Hustlers. First, they tried enlisting student programmers to develop their apps; it didn’t work out. Next, they tried outsourcing, seeking developers through various websites. “That was a disaster as well,” Tucker says. The partners had raised $60,000 in startup capital from friends and family, but it wasn’t enough to solve the coding problem. “Once you realize what it costs to code an app—it can be $10,000 to $20,000—that $60,000 would get used up pretty quickly,” Tucker explains.
However, the Applits founders soon discovered the benefit of having created a large community of users who submit and vote on each other's app ideas. The community was so eager to download the apps that were built, it attracted business partnerships that helped Applits scrap the student developers and more quickly produce high-quality products. From there, the company formed a tight-knit group of talented partners across the world who collaborate on creating apps for themselves and their clients.
Today, Applits is profitable; Tucker says the company brings in revenues of $10,000 to $15,000 monthly. It has received more than 2,200 ideas from its members and launched 10 apps; 10 more are in development. Its most recent app, Best Shot for iPhone, brings new meaning to social photography by enabling users to create public photo albums on a topic where people can contribute their “best shots.” Other popular apps are DrawMyLife and FaceCap.
Getting to this point wasn't easy, though. Tucker describes starting an app company as “a big money sink.” In order to provide growth capital for the business they hope will be their “lottery ticket,” the partners started a second business, Designli.co, that develops apps and websites for paying clients. “We wanted something more day-to-day, even if it’s not scalable [like Applits],” he explains.
These Smart Hustlers have taken advantage of the resources that being Ohio State University students offers. “The university was great about PR—they helped get our name out there,” says Tucker. The partners also used a student-run PR agency and OSU’s Business Builders Club to get advice, assistance and connections.
As for marketing, they’re not afraid to “go guerrilla.” Tucker cites Facebook promoted posts, Twitter engagement and advertising, writing guest blog posts, and posting regularly on forums and in online communities as key marketing tools that don’t bust their budget.
Still working on their degrees as well as Designli.co, Shields and Tucker’s future goals include upgrading the Applits website, expanding revenue services so every user can earn revenue from their contributions rather than just a few, and growing the Applits community.
What advice do these Smart Hustlers have for other entrepreneurs? “Make sure you test everything,” says Tucker. “Have solid contracts in place, and don’t be afraid to pivot your business.”