It's All Our Fault: Why Building a Business on the Apple App Store is a Losing Proposition

Update at the bottom.

Recently, my business partner Brian wrote an article about us promoting an app on Apple’s App Store. One of our strategies was to leverage our existing customers of our NBA apps to promote Final Madness. We had done this with our NCAA basketball apps, and it worked great - in two days, the app made it to #13 in the sports section of the US iTunes store. We had submitted our revised NBA apps to Apple for approval over this weekend. Our thought was that they would be approved by Monday or Tuesday. We thought this would provide enough momentum for the Final Madness to stay in the top #25 until Selection Sunday.

On Monday morning, Apple sent an email. The email notified us that the application review state has changed. Typically, this is done to indicate that the reviewer is unsure about something and needs someone with higher authority to make a decision. In the past, Apple has called us when this would happen. Not this time. After I read the email I was feeling a bit bitter towards Apple. Internally, I was blaming them for this problem. I thought, Why can’t they just accept it as they usually do? Why do they have to go through this annoying review process? I just so happened to stumble upon an article entitled: Note to Entrpreneur’s: It’s Your Fault. The premise of the article is that everything that happens to your business is your fault in one way or another.

Most importantly, the article writes:

“The real trick is not to give the “it’s my fault” attitude lip service, but to actually believe it and live it. Never let your guard down. No whispering to friends/ family that “if only so and so did this” or “if only that hadn’t happened….” Always blame yourself. Its the only way your problems get solved.”

The article is right. We knew about Apple’s developer agreement. Yet, we decided to look the other way.

Later that afternoon, I had finally received the following email from Apple:

Dear Reflect7,\ \ Thank you for submitting your family of fan applications to the App Store. We’ve reviewed your applications and determined that we cannot post them because they appear to contain features, namely,content and feeds, that bear resemblance to well-known third-parties including The New York Times, LA Times and CBS Sports.\ \ Additionally, we determined that we cannot post these versions of your iPhone application to the App Store at this time because of inappropriate ‘Keywords’ used to identify your application. Applications that contain terms, product names, brand names, or entities in their search criteria that are registered trademarks not licensed or owned by the submitter cannot be posted to the App Store. It would be appropriate to remove nba, nba team and NBA.\ \ Please remember that pursuant to your agreement with Apple, you represent and warrant that your application does not infringe the rights of another party, and that you are responsible for any liability to Apple because of a claim that your application infringes another party’s rights. Moreover, we may reject or remove your application for any reason, in our sole discretion.\ \ Please provide documentary evidence that you have the rights to use this content to ensure compliance with the iPhone Developer Program License Agreement. Once Legal has reviewed your documentation and confirms its validity, we will proceed with your application review. Be aware that while your iTunes Connect Application State is displayed as Rejected, it is not necessary to upload a new binary in this particular case. However, if your application is not in compliance, and you are able to make the necessary changes, we encourage you to do so and resubmit your binary for review.\ \ Regards,\ \ iPhone Developer Program

The bomb dropped. The applications that the email is referring to have been in the App Store for over two months now. Why weren’t these problems flagged earlier? From the text of this email, it would indicate that Apple has problems with applications using RSS feeds to link to well known news sources. That pretty much describes all of our Sports Fan applications. Our bootstrapping strategy was over - and it’s all our fault. As I said earlier, I knew that Apple held the keys to their kingdom. I understand that they are well within their rights to control what is on their store and what isn’t. I agree with all of it. The inconsistency of the review process bothers me, but yet again, it’s done by humans. Humans are inconsistent creatures. One app reviewer may interpret a policy different than another. However, it is still our fault.

Why You Shouldn’t Build Your Business on the App Store

I’m not saying that you should stop developing your iPhone apps. What I am saying, is that if you are attempting to build your business off of the App Store you are putting a major liability on your company. Recently, the EFF requested the Apple Developer Agreement from NASA on the FOIA. Read it, and then read it again.

Mark Suster, entrepreneur turned VC, wrote an article: App is Crap. One of his finest points in the essay is that Apple is a channel and not a business model. Mark writes:

“I see too many companies that are building iPhone App companies. iPhone is not a business model unless you’re Apple. It’s a channel. It’s a way to reach your customers. And single channel businesses are vulnerable to the vagrancies of the market place. If you’re a “pure mobile” company that’s fine. There is a strategy for that. But you need to think in terms of broader distribution.”

I think he is spot on. It’s too bad we didn’t focus on this earlier. But, yet we are young, nimble, and hungry entrepreneurs and so we didn’t. Now we know.

A wise man once said: “Stay hungry, stay foolish.” Perhaps he meant that literally?

You can follow me on Twitter @jprichardson

-JP

Update 2010-03-12 10:40 CST:

Many people have asked if we are ‘giving up.’ We are not. We are just changing strategies. My main point still stands, it’s foolish to build a business on the Apple App store.
To my knowledge, there is no trademark infringement against the NBA. The trademarked word “NBA” is not used anywhere in the application in content that we own. Nor is it used to promote the app. In fact, our description clearly claims that we are not associated with the NBA.
I’m not sure what happened to all of the comments. They show up in my Disqus profile, but they are not visible here. I’m looking into this.

If you made it this far, you should follow me on Twitter. Follow @jprichardson

-JP