After spending more than two years at Microsoft helping manage deals with computer manufacturers, James DePoy noticed an opportunity.
“We saw that striking deals took months, if not years, of work,” DePoy recalled. “We thought there’s got to be a better way to do this at scale.”
So DePoy left his corporate job in 2009 and started a new company just months later to solve that issue. The result is appAttach, a five-person Kirkland-based startup that helps connect device providers with app developers.
Acting as a middleman with its own marketplace, the company gives device providers access to top apps while offering an opportunity for developers to have their apps installed on millions of devices. appAttach makes money by taking a small cut when a user engages with a given app.
“Everyone wins,” DePoy said.
Companies using appAttach include Yahoo, Big Fish Games, WildTangent and Spotify. Just today, appAttach announced a new deal with Candy Crush-maker King.com to manage its mobile app pre-load transactions with device manufacturers.
We caught up with DePoy for this installment of Startup Spotlight, a regular GeekWire feature.
Explain what you do so our parents can understand it: “appAttach matches smartphone and tablet providers with app developers to create more useful and entertaining app experiences.”
Inspiration hit us when: “Working in the OEM division at Microsoft and managing OEM preload deals with companies like HP, Dell, Lenovo, etc, we saw that striking deals took months, if not years, of work. We thought there’s got to be a better way to do this at scale.”
VC, Angel or Bootstrap: “The company has raised a total of $1.3 million from investors that include the Washington Research Foundation (WRF), PointB Capital, Seattle Alliance of Angels, Rudy Gadre, and other angels. We took an initial $175,000 in 2009 when we were just getting started with bringing our idea to reality and focused on building out our marketplace for several years. We secured an additional $1.1 million last year to start to scale.”
Our ‘secret sauce’ is: “A click-through distribution agreement (created with input from our top app developers and device providers) coupled with our underlying tracking and analytics give device providers a more efficient and effective way to find, transact and manage the apps they offer their users.”
The smartest move we’ve made so far: “Allowing device providers to choose the apps they want to offer and determine how they’d like to deliver them to the user has been a big market differentiator for us. Whether they choose to preload apps directly onto the device during manufacturing or make them available to users via app stores, websites, offer walls, or other direct marketing channels — we support all types of delivery methods.”
The biggest mistake we’ve made so far: “It’s taken some time for us to find the balance between “build it and they will come,” and, “let’s wait till they ask for it.” We’ve done both … and experienced success and failure. When creating something new and different, you need to take risks and learn from your experiences so you become better at making the tough decisions — we’ve learned that the hard way.”
Would you rather have Gates, Jobs, Zuckerberg or Bezos in your corner: “Zuckerberg. Facebook’s new mobile ad network has shown that it’s a great mechanism to turn app installs into profits. Mobile accounted for 59 percent of the $2.27 billion in ad revenue that Facebook recorded in the first quarter of 2014, about double the percentage of last year. Zuckerberg clearly understands what it means to provide his users relevant apps — he just looks at his bottom line.
Though it was hard not to choose Bezos given the success of Kindle and Amazon’s groundbreaking strategy of driving revenue not from the device, but from apps and services provided through the device. As Bezos said himself: “We want to make money when people use our devices, not when they buy our devices.”
Our world domination strategy starts when: “There’s already north of 5.3 billion mobile phone users around the world today and nearly 2 billion smartphone users — 80 percent of which are on the Android operating system. China, India and Brazil are the fastest growing mobile markets. This is a huge opportunity for developers.
Yet, the fragmentation of the global Android hardware market, where there are tens of thousands of device providers, makes it nearly impossible to execute on the opportunity. As the developers of Candy Crush, Shazam, Swiftkey and Clash of Clans look to reach their next million users, they’re already finding the appAttach Marketplace is the solution for getting their apps in front of many of these potential users.”
We are truly unique because: “Two things. First, we’ve developed a patented process that helps determine the best and most relevant apps for users taking into account key factors like category, install rates, quality, payout, locale support, along with other device and usage metrics. Second, our network of device providers allows us to see a myriad of app combinations and user profiles which we use to understand which apps provide are valued by users and which ones aren’t. We have apps running on millions of devices today and growing at about a million units a quarter.”
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “Don’t be afraid to ask yourself the tough questions. There’s a lot of opportunity out there and while it’s important to create goals and have focus, if you don’t look up now and again and question what you’re doing once in a while, you might not see the bigger opportunities before they pass you by.”