Description
Key Learnings
- Explore business model options and considerations for choosing one.
- Gain tips on how to price your app on value instead of cost.
- Learn how you can use the Autodesk App Store to connect with customers and build your business.
Speakers
- EBErica BeffertErica Beffert is the Senior Group Product Manager for Autodesk Platform Services. Her team works to growth Autodesk's portfolio of valuable APIs to help customers and partners connect data, teams and workflows. Her team also ensures a high quality developer experience through the APS Developer Portal and enables developers to distribute their apps and extensions through the Autodesk App Store. With 10+ years of software product management experience across several industries, Erica enjoys taking an incremental approach to collaboratively solving tough problems. When not at work you may find her learning new construction skills on YouTube to use in her next home renovation project.
- Julia BrunJulia Eremeeva is a Business Development Manager on Developer Advocacy & Support Team. She has worked at Autodesk for 6+years supporting the Developer Partner Ecosystem in North America who actively customize Autodesk desktop products and use Autodesk Platform Services to enable Digital Transformation of their business. Julia also organizes global events for the Autodesk Developer Community such as accelerators, Developer Conferences, APS Tuesdays webinars, and online trainings.
ERICA BEFFERT: Hello, and welcome to "Developing winning business models for your application." My name is Erica Beffert, and I'm the senior group product manager for Autodesk Platform Services. With me today is Julia Brun. Julia, do you want to introduce yourself?
JULIA BRUN: Sure. Thank you, Erica. My name is Julia, and I work as a business development manager on developer advocacy team at Autodesk. Our team's mission is to make companies like yours successful with Autodesk developer technologies and also help you create your own value-driven solutions on top of Autodesk technologies. Erica, back to you.
ERICA BEFFERT: Thank you. Before we go any further, I need to make you aware of our safe harbor statement. This presentation may contain forward-looking statements about our outlook, product capabilities and strategies.
These statements reflect our best judgment based on currently-known factors. Actual events or results may differ materially. Please do not make any purchase decisions based on the contents of today's presentation.
This class is focused on providing a framework for choosing the business model that is right for your company, your customers, and your product. Whether you are an independent software vendor and already develop and sell your own intellectual property, partner with customers to build custom solutions, or currently only build apps and integrations to use within your company, there's always an opportunity to think about what business model best suits your current business and what might you want to adopt in the future. Today's conversation will be divided into four parts, understanding your goals and constraints, choosing a business model, pricing your app, and reaching customers through the App Store.
So let's first talk a little bit about the goals and constraints that can help decide which business model makes most sense for you. Company. Before you decide on a business model, it's important to understand what you want to achieve as a business. What is your revenue mix? What do you want it to be?
Autodesk partners often derive revenue from varying ratios of agency and reseller payments, revenue from services or custom software, and revenue from products or selling intellectual property. What is your goal? Do you want to make money from selling a software product or selling services and custom software?
Your customer goals and constraints. What are your customers' goals? What motivates them and what are they trying to achieve? And how are you helping them achieve that? What do they value and what would they be willing to pay for?
This is critical, especially if you're considering a customized solution. What other products do they use and what business models might they already be familiar with from using these products? These don't necessarily need to be competitive products, but could just be other types of products that they may use in their day-to-day business activities.
Competition. What are the alternatives to your product in the market? What types of business models are those products offering? And what are your customers think about them? It's also important to remember that the status quo or doing nothing or continuing to do what you're doing today is also a competitor and has a business model.
Finally, product. What type of software do you have? Is it a desktop plugin or is it a cloud service? If it's cloud, is it single-tenant or multi-tenant? These types of things are going to impact the business model that will be easiest for you and your customer to understand.
Do you intend to customize your software? Or do you want to have a product that's basically the same thing with a few configurations to differentiate it? What do your customers want? More importantly, what are they willing to pay for?
After you've spent some time considering these goals and constraints, it's time to look at your business model options. This is not an exhaustive list of all the possible business models. We have selected a few with one strong preference, but what is best for your company is going to depend on some of the factors we've mentioned and also maybe some other ones that are unique to your situation.
So the first is subscription. Under the subscription model, your customer pays you a fixed monthly or annual fee to use your product. Your subscription price can be per company, per user, or some other unit of value, such as project. And you may offer subscription tiers if you have companies that are using your product in different amounts. Under this situation, you treat your Autodesk Platform Services costs as a cost of doing business.
Some of the advantages or some of the reasons why you should choose a subscription over a different type of business model include that your customer requires a non-variable price. They don't want to see the amount that they're paying you go up and down every month. It's especially useful to have a subscription if you have a cloud or cloud-connected app. And if your product is going to be configured rather than customized, subscription is really the way to go.
Also, if you see usage patterns that vary in predictable ways across your customer base, this will help make it easier for you to implement tiering. On the other hand, subscription may not be the right choice for you if your each client requires a lot of customization. This may also be because, for example, you're offering something that is new to the market and patterns haven't yet emerged about how customers want to use your software. Also, if usage varies widely between your customers and it's not in predictable ways that would allow you to create tiers, subscription might not be your best choice.
So option-- the second type of business model that you can choose is hybrid subscription and consumption. Under this model, your customer is paying you for the subscription for your product, and they're also paying you that variable consumption rate that is oftentimes based on your APS costs. And then you are passing along or you're paying those APS costs on to Autodesk.
Option two is that you are directly charging the customer or the customer is directly paying with APS. Under this situation, your customer pays you the fixed monthly subscription fee or annual, and your customer pays Autodesk directly for their APS usage.
So why are some-- what are some reasons why you might want to choose this option? Or why it might be the best option for you? So first of all, if you have an app that you have created, maybe you've put it in the App Store to use to generate marketing leads, and you're not charging anything for this app, then going with the hybrid approach and having the customer pay directly for their APS usage while they pay a $0 subscription to you may be a better option.
Or you simply want your customers to have more visibility into the costs of running your app. On the other hand, if your customers require a predictable, fixed-recurring cost, then passing those consumption charges on to them may not be the best situation. Also, having the charge broken up between the fixed subscription costs and the variable consumption cost to the same customer is a little bit more complicated and might be harder for you to explain to your customers. Finally, if you don't want to have to build and manage a system to track how much your customers are using your application, then, again, going with a standard, fixed-subscription rate may be a better option.
So custom solutions. For those of you that are building custom solutions, either because that simply is your business model or, like I had mentioned earlier, you're bringing out something new in the market where you want to work with a couple of customers first before you attempt to productize it, then you should probably go with a custom solution and the custom pricing. And the way that this typically works is you are building a custom solution for each of your customers.
Either you're starting from scratch or you have some sort of base configuration and then you're going to customize the code on top of that. And your customer pays you an initial development fee plus an ongoing maintenance fee to handle the fact that you are effectively creating them a bespoke code. This can be an advantage if your customer's requirements are genuinely unique, you don't see any patterns, and you haven't yet seen a path to productize the solution.
And most importantly, your target customers are willing and able to pay for custom software. It's very common for customers to want custom software. It's less common for them to be able or willing to pay for it. It's not necessarily-- I would stay away from the custom solution model if you are looking to scale quickly. If each of your customers has a different code base and you're maintaining it separately for them, you're not going to be able to onboard customers very quickly, because there's a high support cost due to separate code bases and unique workflows.
OK. So after you've looked through those types of things, you have a better understanding of what your company goals are and what your product goals are and sort of looked at some of your options. How do you go about pricing your app? So I think the take-home message for this will be it's important to understand your costs, but you should price your app based on the value that it is giving to your customers.
But let's talk about pricing. There are many costs that go into developing and running a software product. And APS usage costs are just one of them, but they're the one that we get questions about, so they're the one that we'll walk you through a little bit on how to estimate those costs both before you build and then after you build your software. But ultimately, what those costs are going to be are going to depend on many things, depend on which APIs you're using.
And it's going to depend on your customer usage pattern. So deciding how much you're going to charge for app isn't a one-time exercise. And here are the steps that you can generally go through to help you understand. So first of all, during the phase when your team is developing the application, they're doing maybe a proof of concept. And you're starting to get a better understanding of what APIs are going to use.
You can go ahead and begin to start estimating what your costs would be. This is really a hypothesis that you have based on the APIs that you're using. And you can use the APS token estimator tool, which I've put a QR code to in the slide, which will walk you through some of the most common use cases and help you think about how you can estimate in advance what your costs might be. Second, take advantage of your beta phase, not just to get that product market fit with the offering of your product, but also to better understand how customers are using your application and what the costs might be associated with that usage.
A couple of tips here is that think about trying to select beta partners for your program that reflect the diversity of your expected user base so that you can see different types of usage patterns during the beta. And that will help you better estimate your costs. Also, look at those that usage and see if it clusters into any tiers or whether it was going to make sense for you to just offer one flat subscription offering.
Finally, as good as your hypothesis might have been and as good as your observations may have been during the beta, it's always important to observe and adjust after that introduction to the market. So we recommend consider listing your initial price as introductory to set the expectations that prices may change the first, say, three to six months after you go into the market, and continue to track and evaluate usage after launch.
OK. So you've got a handle on what your costs might be. Now, how do you go about actually pricing on the value that you're bringing to customers? And the questions that you should ask yourself and your company as you're going about pricing it are also the types of questions that, when you have good answers to them, are going to help you have that conversation with your customer and sell them on the value of your application.
As we talked about at the very beginning, it's really important to understand what your customer's goals are and what they value. Where are they looking to make money? Where do they see their business going? And how does your application or the service that you're providing help them to achieve those outcomes? It's also important to understand how are they achieving those outcomes today.
What is their status quo? And how much does that cost them? This might be if, for example, your application is going to help them automate a business process. How many people are involved in that business process today? How many hours?
What are they paying them? Help anchor the value of your product in the value or the expense of the solution today. And also be thinking about what if they don't solve this problem. What is the cost to their business of doing nothing? And I think once you walk through those different examples, a lot of times you may understand that you are undervaluing your application when you think about the value that it's bringing to your customer.
All right. So that's a little bit about some of the business models that are available and how to go about pricing your app. I'm now going to hand things over to Julia, who's going to talk to you about how you can reach more customers by listing your app on the Autodesk App Store. Thank you.
JULIA BRUN: Now we are moving to a part where we will show you how you can reach customers, sell your solutions, and do all of that successfully. We're going to talk about Autodesk App Store. For those who are new to the Autodesk App Store, it is a marketplace and a web service provided by Autodesk. You can search for hundreds of applications, whether that's plugins for Autodesk Revit, Maya, Inventor, and more, or its integrations and cloud applications powered by Autodesk Platform Services.
App Store is a platform where you can find and download a solution that fits your needs. Autodesk App Store is also a place where you can publish your own solutions and share your app with thousands of Autodesk customers across the world. The apps found on App Store are created by third-party developers as well as Autodesk. We at Autodesk place a very high emphasis on maintaining the quality of the app content, as well as delivering top-class user experience that makes it easy to discover and get apps. We also prioritize creating a space where developers, maybe like you, can distribute their apps successfully. And the goal here is to enable developers to find new customers, build, and extend their business.
To number lovers out here, let's learn more about the App Store statistics. Autodesk App Store was started in 2012 with AutoCAD as the main product and with only 170 apps total available to customers. Fast forward to today, in 2024, we have more than 4,000 applications.
And each year, there are hundreds of new apps that get added to the App Store. For example, this year, from 2023 to 2024, we added 507 new applications. And it wouldn't have been possible without third-party developer contribution.
OK. I have a few more numbers for you. The App Store developer community is 1,000 publishers. And there are also four million-- almost four million total visitors per year.
You might be wondering, where are those visitors located? Well, they are distributed across 170 countries. So you can see that you have access to multiple different regions and markets.
On this slide, we will talk about how to get started as a publisher and walk through the steps of the publication process. Let's set expectations. Publishing on the App Store can take anywhere between one to four weeks, depending on a few things. One, understanding of a publishing process. Two, the completeness and accuracy of the app data submitted.
This is really important, because that can either save you weeks or extend the process by multiple months. So let's break down the steps. You start with an onboarding process that includes creating an account for a publisher, setting up payment account information if you plan to publish paid apps, and lastly, submitting app-related information. Next, the app submission moves to the admin review stage. App Store admins will reach out to developers with requests for more information or update recommendations.
Your successful app listing is the team's number one priority and number one goal. Once the app is published, there are a separate set of activities that publisher gets involved in. That includes app management, meaning updating the app yearly with the latest version of Autodesk products and releasing new versions, app monitoring, which includes customer engagement and app performance through dashboards, and then customer support in case of incoming requests from customers. You can also set up troubleshooting and ticketing system for those questions.
Now let's move to the fun part. In the next few slides, we will talk about the most valuable tips and tricks for creating an effective and engaging app listing. Based on our App Store team's research, more than 65% of all App Store users land on the App Details page.
But what's more important, and now pay attention, on average, a user spends only three minutes on the App Details page. So what does it mean? It means that you only have three minutes to capture users' attention. Good news is that we have a few tips and tricks for you to help you make the most out of those three minutes.
If you are considering publishing an app or already have an app listing, take a piece of paper and a pen. We looked at top 10 apps on the store and we identified a few things those app listings had in common. Based on that information, we created a simple checklist that can help you uplevel your App Store presence. So let's go through that.
Does your application have a compelling app description, which is a clear, concise, and engaging app description highlighting key features and benefits of your application? Does your application have visual assets? That might include eye-catching app icons and screenshots, images showcasing the app's user interface and functionality, and so on. Does your application have app reviews and ratings? This is important.
Do you make sure you encourage positive user reviews and ratings and also address user feedback to improve the app quality? Now, does your application have regular updates? That means providing consistent app updates with improvements showing your commitment to user satisfaction. And lastly, did you do competitor analysis? Did you study successful apps in your niche? Did you identify strengths and weaknesses to differentiate?
If you have four or five yes responses, then congratulations. Your app is off to a great start. However, if you responded yes to less than three points, we strongly, strongly recommend reimagining your app listing. That's the time to do that.
This slide summarizes best practices based on our research of successful app publishers. It has lots of good tips, so please pause this recording and take a screenshot. And then we'll move on.
Now, you might be wondering if and how Autodesk helps publishers to be successful on the App Store. We have a few co-marketing activities that you can take advantage of. First, we can feature your app on the App Store. We can also place a marketing banner you create at the top of the App Store for maximum visibility. Next, there is an opportunity to be featured on our social media platforms.
To do that, participate in ongoing customer research, usability interviews, et cetera, and contribute to shaping up our product. And then event collaboration. Feel free to collaborate with us at events to promote your app. And in some cases, you may be invited to events with our support, often at no cost to you. We are eager to partner with you and support your app's success, so feel free to reach out.
So far, you heard Autodesk talking. Let's now listen to a story of an App Store publisher. I will tell you the experience of Plex-Earth. Plex-Earth is the maker of Plex-Earth app, Plex-Earth Lite, and Plex-Earth for Autodesk Forma published on Autodesk App Store. Plex-Earth gives engineers the complete 3D geographical view of their project area with imagery and data from leading satellite providers.
They shared with us three key benefits and opportunities that helped them be successful on the marketplace. First, focusing on customer needs and recurring revenue. They prioritize customer needs and focus on their core competencies. They also meet customer needs at various levels, from drafters and CAD users to high-level decision makers. And they ensure predictable revenue streams through subscription-based pricing.
The second pillar or benefit is increasing credibility and building awareness. Autodesk App Store enabled them to reach thousands of potential customers and expand their reach. And here's a fun fact for you. Formula One, F1, a high-profile organization, discovered Plex-Earth through the App Store. And finally, the third pillar is lead generation opportunities.
Their Lite or free to Pro model created an effective structure for lead generation. They generated a lot of leads through content marketing rather than a dedicated sales team. And last year, Plex-Earth apps had more than 7,000 downloads. And that connected them with some of their best customers.
Before you go, I do have two more slides for you. Please don't be shy and reach out to us. If you need to talk to someone about partnership opportunities and get business support in your application, send us an email at aps.business@autodesk.com. If you have any questions around your application submission and need to contact our App Store team, please reach out to appsubmissions@autodesk.com.
Last but not least, we also have two events coming up after Autodesk University. First, we have an online training for software developers in the basics of Autodesk Platform Services. If you or someone on your team is just getting started with APS, then this training is exactly what they need. It's free, and it covers four different topics. You can attend one or all four days.
Second event. If you would like to get support on your powered application and prepare it for publishing on the App Store, then you should sign up for our accelerator in Atlanta in December. The attendance is also free of charge, but we do need an application from you describing your APS project. APS Accelerators are a week-long, technical support event where you bring your software development project and get technical support from APS engineers. And we do organize some fun activities outside of those coding hours.
With that, thank you very much for being a part of this session. I hope you enjoyed it, and I look forward to seeing you at one of our future events. Take care.