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Paper by FiftyThree
Source: fiftythree.com
Paper, a drawing/sketching/painting app by FiftyThree, caused a small commotion in February by making all of their tool upgrades free. Previously, artists would have to shell out a few extra bucks for tools such as Sketch, Outline, and Mixer (for color) and many fans of Paper were happy to receive a load of great features for no charge.
What’s interesting is the reason FiftyThree’s CEO, Georg Petschnigg gave for this move, saying “Pencil has been doing phenomenally well.” Pencil is the company’s beautiful, Bluetooth stylus that works with the Paper app and with other apps as well. It is the only stylus sold in Apple stores and the top selling stylus on Amazon.com. In essence, FiftyThree is selling so many of their high end stylus, they can afford to give away their full-featured app for free, to attract new customers.
Keep in mind, Pencil was launched well over a year after Paper. It’s unlikely anyone over at FiftyThree predicted how popular their stylus would be, to the point where it is the major revenue source for the company over their flagship app that took the App Store by storm. While they won’t reveal any numbers, Petschnigg gave this great quote that more app developers should not only keep in mind, but strive to emulate:

“For us the mission is still clear. We want to make creativity and productivity more accessible. That will never change. Now our business model, that can evolve.”

What a great and simple statement. Petschnigg reaffirms his company’s commitment to their original vision and purpose with their app, but acknowledges that hey, when it comes to making money, whatever works.

This recalls when Rovio’s Angry Birds was the hottest thing on everyone’s smartphone. While the $.99 game was a big payday due to the popularity of the game, in 2012 the physical goods Rovio sold with the Angry Birds brand brought in an estimated 50% of their revenue. They smartly realized that there was a goldmine of merchandising opportunities with birds and pigs and soon the basic game was free to download to attract more fans who would recognize their brand.

As you get ready to design and launch your app, keep FiftyThree in mind and not only be open to new streams of revenue aside from the usual methods of ads, in-app purchases, and affiliate installs; but actively search for them. Your cute logo or mascot could become popular IRL (thus, always a good idea to invest in the look of your app — you never know what the public might fall in love with) or you could take over an entire accessory market like FiftyThree did. Think outside the app.

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