For S$4,400 ($3,500) plus an annual S$1,000 fee, you will be told secret knowledge that, if applied faithfully, can grant you a regular source of passive income. Money would gush into your bank account in your sleep, and you’d have an opportunity to mentor others towards success.
While it sounds like another internet marketing or investment seminar pitch, a Singapore company has applied a similar modus operandi to mobile app development.
Call it an inevitable commodification of app creation. Founded in 2011 by Alan Yeap, the company, IAWorkshop, holds mobile app development courses where students can build software quickly using a proprietary visual app builder. No programming knowledge required.
But there’s a catch. While the fees may seem exorbitant now – the S$1,000 annual fee entitles you to build 50 apps, no more – they are set to rise even further, says Yeap in an interview with Tech in Asia.
In fact, by 2014, prices will almost double to S$7,888 ($6,287), while the subscription fee will hit $1,000. The first three-day courses are slated to be held in January, and will happen once every six weeks.
Today, the company holds three types of classes: an ad monetization course where students are taught how to build games, chat software, and apps for businesses; a class on building mobile apps and websites for property sales; and a mobile games program for university students.
It’s the ad monetization course that’s the most heavily-promoted, judging by the number of free preview classes that are held by the company’s trainers.
Become rich, but pay up first
Yeap says that the reason for the massive price hike is that the company has developed a “game engine”, essentially a visual games builder, that allows users to clone today’s most popular mobile games – like Ant Smasher, Temple Run, and Bubble Burst – simply by re-skinning a template and publishing it on the app stores.
Each game engine costs S$20,000. We have five engines. We’re charging more because we need a way to recoup the expenses from these new engines.
Which means that for the company to earn back the investment, they’d just need to sign up about a dozen customers. But what’s in it for attendees? It’s an opportunity to earn passive income by collecting ad revenue, the company claims, since a million downloads for an app on Google Play would be equivalent to about $50,000 in advertising revenue through AdMob.
All students need to do is constantly spam the app stores with their products, and IAWorkshop will take care of app promotion and approval. Essentially, they’re paying for marketing expertise, the app building platform, and an exclusive network.
A number of students have benefited from this arrangement, Yeap adds. Two 50-years-olds who have taken the classes have earned sizable income. One is making more than $100 and another over $400 a day from their apps, he claims.
It’s a similar pitch at one of IAWorkshop’s preview classes, which Tech in Asia attended. A marketer said one student had made $5,000 within a month, and another crossed $200 a day on advertising revenue.
Not so simple
However, neither the marketers nor Yeap gave a definite answer when asked exactly how many of its 300 ad monetization course students have made enough cash to recoup the fees. Yeap would only say:
It’s very hard to tell exactly, but I know of at least 20 percent that are making some money.
While pitched as a road to riches, creating apps for IAWorkshop is in reality a hard slog, and the trainers made that clear during the preview. The high cost of entry ensures that students will have to keep churning out apps in the hopes of striking gold: In one month alone, the company has published 1,000 apps through its software using students’ developer accounts. They’re effectively a clone mill for apps built off the sweat of mostly unpaid labor.
It’s a process that IAWorkshop has refined over the months through trial and error. While many of their apps have been struck down for not meeting Google and Apple’s terms and conditions, others have made it, especially on Google Play, where the approval process is lax.
Not surprisingly, these apps are bland and derivative. A lot of them are based on the same template consisting of run-of-the-mill games like tetris, memory match, and puzzle solvers. All of them offer nearly identical gaming experiences. While the new game engine will truly allow them to clone the gameplay of these popular titles, that hasn’t stopped the students from creating derivative apps using an apps builder with limited features.
But they’re somehow raking in the downloads. One of the company’s most successful titles, Subway Train Surf, for example, managed to get a million downloads in the first month. Meanwhile, a search on Google Play reveals tons of apps with slight variations in content that are based on the exact same template as Subway Train Surf. There’s Subway Trains Surf Free Game with over 500,000 installs, as well as Subway Train Surfing and Subway Train: Sydney Surfer with over 1,000 installs each.
A prolific IAWorkshop publisher is one Joshua Poon, whose developer profile shows that he has published 34 apps already.
Some of Poon’s titles are more than a bit misleading. One of his apps is called Candy Crash Fruit Saga, which barely plays like Candy Crush Saga but is nothing like Fruit Ninja. Then there’s Temple Castle Run, which Yeap says has over five million installs but plays nothing like the actual Temple Run game.
Another developer, Unity Concept Apps, does not scream originality either. The account has Angry Tweet Birds, Ant Finger Smasher, and Jetpack Flight, all based on the same exact template but wrapped up with different skins.
Apps by IAWorkshop’s students (L-R): Candy Crash Fruit Saga, Subway Train Surf, Temple Castle Run, Ant Finger Smasher.
Whatever their packaging, these apps serve the same purpose: like SEO-friendly websites generated by internet marketers, they induce clickthroughs from ads. While there’s still a need to refresh the content of these apps, they’re lower maintenance compared to content sites. This arguably gives apps a better ability to generate passive income since it doesn’t require as much maintenance as a website.
Ultimately, it’s a volume game, says Yeap, where multiple versions of the same app, with slight tweaks in title and icons, are published to test which version will get the most traction.
Despite their unexciting nature, he insists that no black hat trickery has been used to generate the app downloads.
We’ve never paid for any advertisements nor done any promotions. We have access directly to the Google AdMob team and we constantly get advice from Google. We understand how Google Play store ranks apps and we are following their policies.
There’s another way to milk the cash cow, of course. Some of the students, says Yeap, end up joining the coveted A-team as trainers (who often double as marketers). Selected not only by how much money they make off apps but also their ability to teach and sell, these individuals, while not employed by the company, earn a commission for every student they sign up.
However, only a select few students – ten to be exact, with six from Singapore and the rest from Malaysia – end up as trainers. So technically, it doesn’t matter if these marketers don’t make enough money from apps alone – they could still cash out by selling the dream to others.
IAWorkshop’s prolific app publishing is reminiscent of S4BB, a Blackberry app development company best known for cranking out 47,000 apps, more than a third of the total 120,000 apps on the Blackberry World app store.
But instead of using a team of in-house developers to generate apps on a template, IAWorkshop relies on a group of learners – retirees, students and mid-career folks with zero knowledge of software development – who pay thousands just to access the app creator.
While IAWorkshop doesn’t take a cut of its students’ advertising income, there’s a tremendous opportunity to profit from this arrangement by selling off the app while at the zenith of its usage rate.
But Yeap has no plans to do so. He says: “Why sell off the app now when we’re generating so much ad revenue from it?”
Despite complaints, company to expand
All businesses are bound to have unhappy customers. While Tech in Asia has attempted to contact them, no one has agreed to be put on record for fear of legal reprisal.
Nonetheless, common themes emerged in these conversations. One major sticking point is the inability for some ex-students to generate enough income to earn a profit. But that is par for the course, despite the sales tactics that marketers may have used to get customers to sign up.
Others have requested for refunds after paying for it, but got rejected because the terms and conditions for the course disallow cancellations. While not mentioned in the contract, Tech in Asia was told that refunds are given only if students do not make a single cent from their apps within a year after following the company’s guidelines.
We did refund 100 percent to students that were really unable to follow as they are totally computer illiterate and I also did refund 100 percent to a few students that are causing trouble in the class.
According to Si Han Xu, a legal executive at a Singapore law firm who examined a copy of IAWorkshop’s contract, the terms in themselves are nothing out of the ordinary:
It is not uncommon for schools to disallow cancellation of enrollment because it affects their planning for class sizes […] content-wise, [the contract] is neither unfair nor unreasonable.
However, an individual who attended a preview session and has declined to be named says that the contract felt too one-sided since it does not contain escape clauses for the consumer, such as “cooling off” cancellation periods that outline how customers can get off an agreement with a reasonable percentage payment or loss of deposit.
“There is very little about what IAWorkshop owes the consumer or what the consumer owes should they cancel, but a lot that locks the consumer into obligations and payment penalties, while forfeiting their rights to service or bonuses,” says the attendee.
Despite the complaints, IAWorkshop is pushing forward with expansion. A student from China is taking the curriculum into the world’s most populous country, and a Wild West in terms of app quality.
The education market is also big on the company’s radar. It has just launched classes in Universiti Putra Malaysia, a public university in Malaysia, and is in the midst of securing slots in an Institute of Technical Education in Singapore, charging $500 a student.
It’s also figuring out how to make and distribute educational apps, taking advantage of Google’s own push towards the K12 market and schools with its app store and Chromebooks.
Which means it’s back to the lab for the company, as they figure out once again how they can create apps cheaply and at scale without getting rejected for violating Google’s policies.
The groundwork is being laid. The team is already reaching out to teachers in Malaysia’s schools and universities to see how they might get e-textbooks into the hands of students. It’s a potential goldmine: Malaysia’s education ministry has launched an initiative to get Google Apps and Chromebooks into the hands of the country’s 10 million teachers, students, and parents.
Ultimate clone machine gets cloned
Yeap claims that IAWorkshop is the first and only company to do something like this in Singapore. But that is changing. He suspects that individuals, probably from a competitor, have been approaching potential sign-ups to spread “false rumors” that the training is “not workable” and that their student testimonials are faked, in a bid to deter customers from joining the program.
Meanwhile, at least one other Singapore company, Set An App, is adopting a similar model but with less onerous terms – unlike IAWorkshop, the company allows consumers to get a refund before the course starts, although they’ll have to forfeit their ten percent deposit.
Its marketing strategy is rather different too. While still emphasizing app development as a means of creating passive income, it says that employees can reimburse 160 percent of the course fees – slated at over S$14,888 for two learners – using the Productivity and Innovation Credit scheme, a Singapore government tax and cash payout incentive with the intent of spurring productivity among local enterprises. Essentially, the government is sustaining Set An App indirectly.
The benefits of internet marketing-like businesses like IAWorkshop, which charge thousands of dollars to non-tech-savvy individuals for monetary value that cannot be reliably replicated, has been questioned by some.
While they have fans, critics wonder if these businesses are really adding value to the market or increasing clutter on app stores, degrading the whole Android experience. And if only a small minority of customers can generate substantial income, is there really a point to these courses?
Then there’s the question of whether there are better ways of generating income from mobile apps. Learning to code is one, but building a winning app is an endeavor requiring massive resources and luck. The outcome is highly uncertain too, and probably not much better than the success rate IAWorkshop can give.
Yeap put it in terms of simple cost-benefit analysis: “Most new companies will fail anyway. What we’re doing is lowering the barrier to entry for people to make money from apps.”
Expect dozens of Ant Smasher clones to hit the market next year.
(Editing by Steven Millward and Josh Horwitz)