Why we Love the App Economy & Hate Financial Tyranny
The days of delayed payments for mobile apps are over; say hello to Qwil’s Instant Liquidity Solution
We at Qwil hate payment inefficiencies, cash crunches, and financial servitude. We started out, and continue to focus, on empowering the Freelancer Economy. Yet, we’ve realized the value of our on-demand liquidity solution spans across a number of tech-first verticals whose cohesion is tied to the unfortunate common theme of unnecessary payment delays. In the age of instant gratification, critical operational tasks such as timely payments are essential (let alone expected). We consider the deliberate avoidance of timely payments to be a faux pas for any platform that has the means to make more efficient payments, but chooses not to.
As mentioned in our prior app vertical announcement, the universe of app monetization options is dominated by a few big platforms that have the leverage to set their own terms. Why is this? The answer is quite simple; distribution. Without the Apple and Google ecosystems, app developers would have scant options to distribute apps to a global audience. These platforms exert their control by taking a large piece of the pie on a per sale basis and sending the remains to developers on stiflingly slow net 15/30/60+ payment cycles. Sadly, this “law of the land” greatly hinders potential growth by reducing a dev’s ability to reinvest profits at an ideal pace without resorting to external financing, which is never a fun prospect.
Why we Chose Mobile as the Next Industry to Support
Here’s a question for you, dear reader. If you had the option of receiving your accrued app store earnings today, or 1–2 months from now, which option would you choose? Not to be presumptuous, but I’m relatively confident that you’d probably choose to receive those earnings today.
With this conviction in mind, we first decided to test our expanded hypothesis that access to ongoing cash flow is the prime ingredient missing in a very simple, but ubiquitous growth formula for app developers looking to rapidly scale revenues.
Our proposed test was very simple — onboard a customer, immediately fund his accrued earnings that were due in a month, and provide funds on a weekly basis (5x-9x faster), as opposed to the net-30 terms he’d been dealing with to see if he could quickly scale his revenue.
He had been recycling most of his earnings directly back into paid marketing every 35–60 days when he was paid by the platform, and was seeing a consistent return on investment each time. While time to breakeven and ROI-positive results often exceeded 60 days (pretty typical for most apps/games that rely on long-tail “power users” to boost the average lifetime value of the overall user base), newly acquired users showed promising retention and spend behavior. However, the long delay in collecting his earnings led to a chronic cash crunch within a week or two after he had exhausted his marketing budget, thus hindering his potential growth. Once again, the only independent variable tested was the cash conversion cycle (i.e. time between recording an in-app-purchase and receiving funds for that purchase) to highlight the direct relationship between access to cash flow for reinvestment and velocity of revenue growth.
So…was ongoing access to cash flow the only missing variable in his growth formula? As you’ll see below, the answer was a resounding YES.
A Synopsis of the Data
Here is his daily and weekly revenue chart for the month of January, prior to signing up with Qwil. He was paid the first week of January for November earnings and reinvested the proceeds over the rest of the month. It should be pretty self-explanatory, but the trend-line of weekly earnings is trending down as the finite marketing budget was quickly depleted.
On February 2nd, we signed up this customer, provided access to his accrued earnings since his last payment at the beginning of January, and set him off to the races. However, instead of having to wait until mid-March for his next payment, we provided him with ongoing access to the daily earnings he was accruing, allowing him to rapidly reinvest into his profitable marketing campaign. Within a month, said customer was able to reverse his stalling momentum, scaling weekly revenue 2.5x in a four week span during which he would typically be waiting in vain for a single platform payment as his earnings sat hopelessly locked up in a digital vault.
Hypothesis Confirmed: Velocity of Cash Flow has a Significant Impact on Velocity of Growth
The customer in question scaled his weekly revenues nearly 300% within a month by rapidly reinvesting his daily earnings into the profitable user acquisition campaign. We got REALLY excited because this customer’s rapid success validated our hypothesis that ongoing access to cash flow is the essential ingredient in a master growth recipe. Moreover, this growth recipe is easy to replicate and has the ability to jumpstart the momentum of the entire mobile ecosystem, granted your app has the formula in place for profitable user acquisition.
To reiterate, the paramount issue that negatively affects the App Economy’s potential rate of growth is the absence of this critical ingredient — cash flow. This problem is not inherent, but rather, it is a business decision enforced by the powers that be, simply because they say so. Without cash flow, you simply cannot scale a business that requires steady reinvestment into new customer acquisition, let alone an app in a hyper-competitive marketplace where fickle users often churn within days of being acquired. When you’re tied to inflexible payment terms, you’ve essentially handed over the reins to a third-party who could care less about your cash flow management. We’re here to provide an alternative to this totalitarian rule of law by returning control to you, the rightful owner of your own finances.
Is lack of cash flow a problem affecting your growth? Let us know!
For more info on Qwil’s on-demand cash flow solution for the App Economy, shoot a note to jamie@qwil.co.
Team Qwil
