Webapps By The Numbers

I’ve been pouring over the results of the 2009 Webapp Survey from TechCrunch and Carsonified.  This really shattered a few perceptions I had about the webapp industry.

Survey Says:

50% of webapps have less than 1000 active users.

People can’t get traction.  This goes right into the second point.

50% of webapps get less than 1000 uniques per month.

You can’t create users if you don’t have traffic.  Most webapps have a 1% conversion rate.  That is, at 1000 uniques per month, you’d only create about 10 customers.

50% of webapps pay less than $1 to acquire a user.

Webapp’s don’t spend any money to find users.  Rather, they don’t spend anything to be found by users.

75% of webapps cost less than $10,000/monthly and are run by 1 engineer.

Most webapps are one man shows with no designer leaving only 25% with co-founders.

57% of paid webapps make more than $5/user/month.

Compare this with only 25% of free webapps making more than $5/user/month.  It appears that per user, paid webapps make more. (note: this says nothing about traffic levels).

90% of free apps make less than $1000/month.

That speaks for itself.

How To Fix It:

Focus on traffic, not conversions.

Would you rather have 2% conversion on 1,000 views, or 1% conversion on 10,000 views?  That math is easy.  Start out looking for traffic and focus on conversions later.

Most free webapps don’t make significant revenue.

Take the “traffic now, monezite later” approach, but have an idea how you plan to make revenue.  There’s a good chance that, like Twitter, it could be tough.

Most apps don’t have a marketing spend.

The old adage “you need to spend money to make money” seems to apply.

Find Co-founders.

Make sure they wear different hats.  Most webapps have a single engineer, no designer, and no bizdev.  An engineer, a designer, and a floater is looking more and more like the ideal recipe.