In exchange for the additional exposure Labor Mate would receive, I would rebrand Labor Mate to look like an app from the large company and part of the net revenue from sales would be split. Best of all I remain owner of the app and I have final say in what goes into the app. The deal could be looked at, in some ways, as corporate sponsorship for Labor Mate. And I was stoked!

Over the next few months we negotiated the terms of the agreement. At the same time, we worked on rebranding Labor Mate. I was pleased with the final results, which was a much nicer looking Labor Mate. And the corporate branding was done in a very tasteful, non-intrusive manner. My only complaints, which were minor, were the desire to include a splash screen and the new look was a little too foo-foo looking for my liking. Still, I was excited about the opportunity.

It wasn’t until about a month ago that my opinions about the deal started changing from excitement to concerns. Contract negotiations were slow and becoming much more complex. Lawyers got involved turning a “no nonsense” agreement into a 3 year commitment with requirements for various liability insurance, errors and omissions insurance, service level agreements, and more. Assuming Labor Mate sales remain the same for first 12 months of the agreement, I would pay out roughly 25% of net revenue just in legal and insurance fees. The deal was no longer feeling like a great opportunity.

The slow progress on contract negotiations wasn’t the only thing changing my mind about the opportunity. I starting feeling as if I would not have final say in Labor Mate’s functionality. Also, receiving visual assets from the large company was slower then I’m use to, and the extra time needed for internal approval of the app before submitting to Apple was dragging. My concerns grew as a result. I set aside time to work on a White Peak Software products, and I often don’t have time or patience for these types of delays. Was this something I could expect in the coming years?

As the weeks went by I was starting to feel like the once great opportunity was raising too many warning flags indicating a nightmare in the making. Now please note, what I would call a nightmare business arrangement might be a walk in the park for others. I’m set in my ways. I’m an indie dev. I work from home. I make the decisions. I control what I work on and when. I have my own way of working, providing support, and determining success. And I don’t like making compromises on matters I disagree with. Anything that changes this for me is a nightmare in the making.

I started feeling the deal would mean giving up the control and freedom I enjoy as an indie dev. I felt I might be expected to drop everything when the large company decided changes were needed for the app. And I would need approval from the large company on any and all changes I want to make to the app. There was also a good amount of monthly reporting required, beyond financial reporting, that is not uncommon in Corporate America. The deal would mean I have a bond with a large corporate business partner regarding this one app and as my past has repeatedly shown, I don’t function well in Corporate America.

To make matters worse, there was no long term plan for the rebranded Labor Mate. What happens if the agreement is terminated early? Would that be the end of Labor Mate? Would I be required to pull it from the App Store or would I only need to remove the branding elements from the app? Would there be pressure to support other mobile platforms? And what if my vision for Labor Mate’s future differs from the large company’s vision? What would be my options going forward with Labor Mate?

There were too many unanswered questions for my liking. What was once an exciting opportunity was already causing undo stress and concerns for me. In the 3 months that past, things didn’t get better. They got worse, from my point of view. And if that can happen in a short 3 months, what would the next 3 years be like? My gut kept telling me it would be a 3 year nightmare.

Everyone I talked to about this deal agreed, it sounded like a great opportunity in the beginning but not so great in the end. Everyone also agreed I should walk away from the deal before it was too late.

So today I talked with my contacts at the large company. I explained that this opportunity wasn’t right for White Peak Software and that I am stepping away from the deal. To my surprise, it came as no surprise. I guess that means I did a good job communicating my concerns over the last couple of months. It also might mean they recognize indie devs and Corporate America don’t always mix.

I should note the individuals at the large company were friendly, understanding, and tried their best to make the deal work. They too were feeling the stress and were annoyed with the lengthy negotiations. In the end, though, I had to decide what’s best for my company, and this deal wasn’t in White Peak Software’s best interest.

Despite the distractions of this deal over the last 3 months, all is not lost. I did learn, and re-learn, some valuable lessons.

1. If it sounds too good to be true then it probably is.
2. Lawyers for the other side suck because they are not looking out for your best interest. Lawyers for your side are awesome because they are looking out for the your best interest.
3. Talk to friends, peers, business associates and colleagues, and anyone else who will listen about any major business deal. They will often provide insight and points of view you will never think of.
4. Don’t get distracted by too good to be true opportunities that do not fit into your business plan. And don’t try to make the opportunity fit into your business plan just because it sounds too good to pass up. It’s either a natural fit for your business or it is not.
5. Stand by your principles
6. It’ okay to say “No” even if no comes 3 months down the road.
7. And lastly, if it sounds too good to be true then it probably is.

So what’s next for Labor Mate? I’m going to take the money I would have spent on extra insurance, hire a kick-ass designer, and get to work on Labor Mate 2.

Labor Mate continues to bring in over $1K per month despite the higher price, but the trend doesn’t look good. Over the last few weeks, the number of sales has decreased everywhere except in Japan. For some reason, sales are up in Japan and if not for Japanese sales in August, Labor Mate would have posted it’s worse sales month in 6 months.

Since it’s inception date, revenue for Labor Mate has been on a slow but steady rise. The higher price has reversed that trend. Labor Mate now appears to be on a slow but steady fall. Not only that, Labor Mate, which at one time was in the Health and Fitness Top 100 category in App Stores throughout the world, is not longer visible on any Top 100 chart, anywhere. This three month pricing experiment maybe the start of a slow death for Labor Mate, but it’s not done for yet.

I have big plans in the works, and a new update is just around the corner. I was planning a big release in a few weeks that would hopefully justify the $1.99 price tag in the eyes of consumers but I’m changing my strategy. Starting today, Labor Mate is back down to 99 cents, and instead of a big update in a few weeks, I’m going to release 3 or 4 updates over the next 1 to 2 months. My goal here is to get Labor Mate back on track and return to the trend I was seeing before the price increase.

Update: One thing I should point out is Labor Mate has a lot of competition. The other similar apps cost between free and 99 cents. This maybe a key reason why a $1.99 Labor Mate cannot sustain the slow but steady growth seen by the 99 cent Labor Mate.

I increased the price of Labor Mate by $1 on May 15, going from $0.99 to $1.99. By increasing the price on May 15, I was able to compare the first half of the month with the second half. And as I mentioned in the previous post revenue had indeed gone up. But I was curious to see if this would continue and what might be the long term effects, so I left Labor Mate at $1.99. After all, I made more money in May as a result of the price increase.

June is over and the sales numbers are in. I’m now able to compare a full month of sales (for June) at the higher $1.99 price to a full month of sales (for April) at the lower $0.99 price. And I can compare these numbers to May’s numbers. The results might be surprising to some, but are inline with what I secretly thought would happen.

In June, Labor Mate earned a whooping $31.94 more money than in April, and it earned $30.90 less compared to May. In April, Labor Mate averaged $35 per day. The average was $37 per day in May, and only $36 per day in June.

Revenue from Labor Mate has been on a slow but steady increase since it was first released back in 2008. Though I cannot prove it, based on past trends, my gut tells me Labor Mate would have likely hit June’s revenue number in May without the price increase. And my gut, again based on the trend, says June would have probably hit May’s number without the price increase. In other words, while the price increase did improve Labor Mate’s revenue, the amount of additional revenue resulting from the price increase is actually no different from the slow and steady increase in revenue I was already seeing at the lower, 99 cent price point. As a matter of fact, I saw a bigger jump in revenue between March and April, with April bringing in a whooping $175.71 more than March.

I’m now convinced the price increase did little to improve revenue, and actually the price increase likely did more harm than good. Prior to the price increase Labor Mate was ranked in the Top 100 in the Health and Fitness category for a number of different countries including the U.S. Today Labor Mate is no were near ranking in the Top 100 in most stores.

Another negative effect caused by the price increase is that fewer people are now using Labor Mate. As I noted in the previous post, the number of daily downloads dropped. This means fewer people are buying Labor Mate, which in turns means fewer people are using it. I believe Labor Mate’s slow but steady raise was due in part to word of mouth advertising. Now that there are fewer new moms and dads buying and using Labor Mate, there are fewer people recommending Labor Mate to other new moms and dads. And I admit, ignoring price for a moment, I’m a little disappointed that fewer people are using the app. A part of me prefers selling at a lower price point so more mom and pops to be will use it. (Hmm, maybe I should release a free, iAd supported version.)

So what’s next? I’ve thought about dropping the price back down to 99 cents, but this could lead to a backlash from the folks who purchased Labor Mate over the last 6 weeks. Plus, $1.99 is still cheaper than a large cup of Starbucks coffee. The better idea, and the one I have been planning all along, is to continue improving Labor Mate and make it stand out above the other 99 cent copy cats. This includes leaving the price at $1.99 for now. After all, as one recent new user said to me in email, “it is a very practical and intuitive app and certainly justified at $1.99.”

For those who don’t know, Labor Mate is a niche app for the iPhone. It has been in the Top 100 in the Health and Fitness category for multiple App Stores including the U.S. for more than a year. Back in November Labor Mate’s status in the Health and Fitness category started to drop due to two competitors being mentioned in the What’s Hot lists. Despite the drop in rankings Labor Mate continues to sale well, slowly and steadily earning more money per month. A big part of this success comes from international sales, which have steadily improved since translating Labor Mate into 8 other languages. Another part of the success comes from the fact that the app is rock solid. It doesn’t crash, and as one of the reviewers recently said about Labor Mate, “Maybe not the slickest looking app for counting contractions, but we didn’t want to risk crashing or accidentally losing data – we just wanted a reliable app that would work under pressure.”

Even though I was not confident of a positive outcome, I decided to follow the advice from Jon and Daniel. I raised the price of Labor Mate from $0.99 to $1.99. My plan was to leave it at the higher price for a minimum of one week. As expected the first full day at the new price saw spike in revenue. However, sales dropped. This trend continued for the first week. As a result, Labor Mate lost most of its visibility in the App Store’s Top 100 for Health and Fitness. I figured it was only a matter of time before sales and revenue hit an all time low.

Despite what appeared to be a downward trend, I decided to continue the pricing experiment for a second week. To my surprise sales started to return to its normal pattern, a spiky, Bart Simpson-like hair cut. What I noticed was exactly what Jon and Daniel said would happen. I started making more money. Jon and Daniel were right! Sure, daily unit sales were lower than before the price increase, but revenue was higher for those two weeks. So while Labor Mate dropped from the rankings of the Top 100 in the Health and Fitness category and the number of units sold per day dropped, in the end I made more money.

The next big question now is, will Labor Mate revenue continue its slow but steady climb at this higher price point, or will the overall trend start heading downwards? I’ve decided to keep Labor Mate at the $1.99 price for another week to see what happens.

Meanwhile, for those of you who prefer looking at charts, I’ve included the sales and revenue charts for Labor Mate covering the time period between April 1, 2010, and May 31, 2010. There was a spike in mid-April but sales started dropping afterwards. The red-dash line is the first full day at the new, higher price. The spike on that day was almost as high as the spike in April.

“This works great for false labor; I used it every night for a week – sometimes for three hours at a time and I thought it would be neat to mail the info to our midwife. However, when my labor actually started and my water broke two days ago, I thought of this AP and how it would be the last thing I’d do @ 3 min apart & how my review might say: if you’re using this, it is false labor…”

I admit I would not expect my wife to use Labor Mate while she is having contractions. That’s why I tell people Labor Mate is typically used by the expecting mom’s birthing partner, be it her husband, boyfriend, life partner, a friend, and so on. A mom-to-be has too much going on to worry about timing contractions. Let someone else do it. (Though there is nothing wrong with a single mom timing her own contractions. Everyone’s experience is different.)

So while I agree with Whidbey Island Filkin-in-Law that the last thing a woman would want to do when contractions are 3 minutes apart is to touch a start and stop button on an iPhone, I don’t understand the 1-star rating. Whidbey Island Filkin-in-Law used the app every night for a week up to 3 hours at a time. She obviously found value in the app and yet she rated it with a single star.

Reviews like this one aways leave me scratching my head and wondering.

How can you help?

You can help by purchasing one of our products: Labor Mate, Killink CSV Editor, or SMTP Diagnostics. Don’t have a need for one of our products? Then visit the Indie+Relief website for a list of other independent software companies participating in this Haiti relief program.

Get great software and help with efforts in Haiti at the same time.

In January 2009 Labor Mate broke into the Top 100 for the Health and Fitness category in the U.S. store. It stayed in the Top 100 daily for nearly 11 straight months peaking at number 34 in the U.S. store. Labor Mate has also been in the Top 100 for the Health and Fitness category in a number of other stores including the U.K., Japan, Sweden, Netherlands, and Italy among others. All of this changed in mid-November. Labor Mate’s fall from grace had started.

A couple of things happened in November bumping Labor Mate out of the Top 100 in its category. First, it received a couple of ridiculous, negative comments in iTunes. I’m not sure of the real impact but the slide from the Top 100 started at the time of the comments. Second and only a day or two later, BabyBump made the What’s Hot list. I believe it is this second point that has taken the biggest toll on Labor Mate’s Top 100 streak.

BabyBump was released in October 2009, just over a year since the initial release of Labor Mate. BabyBump includes features that I have long planned for Labor Mate but have yet to implement. And honestly it looks better than Labor Mate in my opinion. Creative design has always been a weak skill set of mine.

At the end of the day, BabyBump did it better. This was a major wakeup call for me. I let Labor Mate, the one time market leader in its space, grow stale. I had a top ranking and it was mine to lose. And lose it I did.

A major mistake I made in 2009 was to focus most of my attention on contract work and not enough time on my own company. This lack of focus was a setback but also a major kick in my ass. Unfortunately it took Labor Mate’s fall from grace to light the fire under me (and in me). I have learned from this lesson and will do better going forward. For starters, I have since hired a part-time designer as the “Creative Director” for White Peak Software and the first project we worked on together looks great. It will be in the app store soon.

So what about Labor Mate? Is Labor Mate dead? No, far from it. Just a few weeks before the fall from grace, version 1.5 of Labor Mate was approved. This release added support for 8 additional languages, Dutch, French, German, Italian, Japanese, Spanish, Swedish, and Russian. So while sales in the U.S. have dropped, sales worldwide have improved and Labor Mate continues to sell an average of 31 units per day worldwide. So despite not being in the Top 100 of the Health and Fitness category in the U.S., sales remain steady. Also, I have big plans for Labor Mate 2, which I will start working on soon.

Dutch
French
German
Italian
Japanese
Spanish
Swedish
Russian

Labor Mate is available for only $0.99 in the iTunes App Store.