July 27, 2016

What Does It Take to Make a Viral App?

What does it take to make a viral app? We take a look at the rise of Prisma, and how it got so popular.
Grant Glas
grant@app-press.com

As co-founder and CEO of App Press, Grant created his first app in App Press, and has since built 10 more with over 100K downloads.

Prisma is a photo editing app that transforms your pictures into works of art, and it's one of the most popular apps on the App Store right now. Odds are if you use an iPhone, you’ve either downloaded Prisma, or you've heard about them. And I’ve got to admit, I got sucked in when I downloaded Prisma. I spent a couple hours editing photos of my daughter!

The app has reached over 650,000 installs, and has already received a rating of 4.5 in the US and Russia.

It’s starting to blow up, and I highly suggest you download it.

‍Source: Prisma Labs Inc.

I've been playing with the app for over a week now, and I started to get curious about what it took to build Prisma, in terms of time invested, financial cost, and resources required.

After doing some research online, it appears a team of two developers launched Prisma - founders Alexey Moiseenkov and Andrey Usoltsev. Moiseenkov has claimed it took them less than two months to build the first version of Prisma. Odds are good Moiseenkov and Usoltsev were paid in sweat equity while working on Prisma - the app isn't generating revenue just yet, and so there's no capital to generate salaries for the founders.

Further, I couldn't find any information about a Seed round of funding anywhere, reinforcing the assumption that the founders were paid in sweat equity rather than drawing salaries. Not an uncommon story for a tech startup!

Prisma uses advanced technology to convert photos into works of art. It may have taken the Prisma team less than two months to build the app, but the knowledge of the underlying technology and how to use it absolutely took a lot longer to acquire.

So, What Does it Take to Make a Viral App?

If you're curious about making a viral app like Prisma, figuring 6 to 12 months of development work with a team of 2 to 3 people is a realistic estimate, based on my experience over the last 5 years building hundreds of mobile apps.

Making a viral app perfectly positioned to raise additional funding or be acquired requires a lot of elements working together. It takes more than just a good idea. It takes the right team with the right skills to turn that idea into a reality.

If you want your app to have viral growth, you have to start with a good idea that provides value, and you have to make it easy to share with others. People are naturally inclined to share stories - it's practically built into our DNA. When we find something useful or interesting, we want to share it with our friends and family.

Using existing channels is a perfect way to spread the word. As a photo editing app, Instagram is a natural fit for Prisma. As soon as you apply a filter in Prisma, you can easily share your newly created artwork on Instagram or Facebook. Making it as easy as possible for your existing users to spread the word about your app is a key part of viral growth.

Every photo posted from Prisma to Instagram automatically exposes Prisma to the people following the person who follow the original poster. Prisma is also gaining access to a dedicated user base - people who spend time browsing Instagram, looking for interesting photos, and new people to follow. It's a natural growth channel, and social media has absolutely been key to Prisma's success.

For an app with this kind of impact, dividing equity between 2-3 founding team members can be a challenge. Oftentimes, the startup team members that devote the most time (or ‘sweat equity’) receive the largest part of the company. If two of those team members were full-time developers and everyone was paid the same salary, the equity breakup should resemble this (based on an iOS developer salary of $85,000, from Glass Door).

A sample equity division might look like this, for a viral app that took 12 months to make:

Developer 1 (Founder) full-time for 12 months = $85K in sweat equity = 45% ownership

Developer 2 full-time for 12 months = $85K in sweat equity = 35% ownership

Developer 3 part-time for 6 months = $42K in sweat equity = 20% ownership

Total estimated sweat equity cost to build V.1  = $212,000.00

(Fun fact: In research I’ve done, the $200K - $250K number comes up over and over as the capital investment required to launch a Minimum Viable Product MVP of a viral app.)

Here is a great article to learn more about dividing equity.

That’s a long time and a lot of money to spend working on a project. Given this kind of an investment, there has to be an upside. Plus, maintaining a viral app takes a larger team, and more capital. Thus the need for investment.

As of July, it look like Prisma raised $1M - $2M on a $8M - $20M pre-money valuation. Here are the metrics I’m guessing they used to formulate the valuation:

650,000 installs and 100K - 325K daily active users (DAU). (For perspective, Snapchat has 100M+ DAU, and is worth billions).

With the $1M - $2M in funding, the founding team can start paying themselves a salary. Prisma also launched an Android version of the app 30 days after launching on iOS. With an Android and iOS version of the app, you’ll need to at least double the team to 6 developers, and with this many DAU you are more than likely paying Amazon Web Services (AWS) $10K - $25K per month, for hosting the app.

Total estimated cost to maintain V.1 of Primsa on iOS and Android for 1 year = $724,000.00

As you can see, a lot of time and money goes into building a successful app. But if executed properly, all your hard work could pay off. Like a $100M acquisition payday from Facebook or Snapchat.

Want to know more about how to give your app the best chance for viral growth? Here's a crash course on app store optimization - some best practices for making your app easier to find in app store searches.

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