Chad Mureta
Author of App Empire, app entrepreneur, advisor and investor
Where to hear and read about Chad Mureta1 episode or test
Chad Mureta is the author of App Empire and an app entrepreneur who got into apps in 2009 and says he has sold eight companies for seven figures or more. The lesson most worth taking from him is to run an app as a measured business: earn ratings and engagement first, then monetize with subscriptions that buyers can value.
I model others that work and then I tweak from there.
Chad Mureta's App Marketing Strategy (App Empire)
Chad Mureta: the story and the lessons
1Chad Mureta on running apps as real businesses
Mureta still runs on the 2009 fundamentals, not store tricks. He says some old ASO tricks have "definitely dried up" and Apple is catching on to keyword gaming. He says he still earns more now than ever, and that 2020 is better for him than any year before.
The core is understanding the marketplace, the monetization model and the demographic, not skinning a copy and hoping.
He knows his acquisition cost, retention and lifetime value. A real business knows what a user costs, how long they stay and what they are worth. Buyers want a predictable machine, not rankings that will vanish.
"A real business understands their user, they understand their cost to acquire the user."
Mureta builds every company with a sale in mind. His eighth million-dollar company had just sold when he spoke. He says there is a whole process to selling, which he planned to cover separately.
Subscriptions made his app income recurring and sellable. He cites about $50 a year, $10 a month or $5 a week. Recurring payers let buyers compute attrition and acquisition cost, and he says that adds "another zero" to a company's value.
He calls subscriptions the best thing he has seen in his business career, and says his success multiplied three, four and ten times. His e-commerce businesses struggle with inventory and complexity, while digital is "on fire".
He pairs his artistic side with analysis on purpose. Mureta finds data work boring but says it is needed to scale. An analytical business partner balanced his artistry.
"You have to be very analytical in this business if you want to grow and scale." He also says having no fallback forced him to make it work.
2How Mureta turns downloads into ratings and revenue
Mureta focuses on what happens after the download. So much effort went into the front end that the back end got little attention. He still wants conversion up front, then reads the data to raise time in the app and daily use.
Time in the app feeds the store algorithm.
He front-loads ratings and delays monetizing. The first call to action, right after the user gets something of value, is to rate. Once enough ratings are stacked up, he switches monetization on.
"I typically won't monetize in the beginning because I want to front load all my ratings."
Traffic volume decides when he monetizes. The wait can run from two weeks to two months. At 10,000 to 20,000 downloads a day, ratings stack up fast and he monetizes sooner.
If traffic is thin and he does not yet understand the user, he keeps optimizing: "If I'm not getting that, then I don't go too early."
He delivers value in the first minute, then asks. In a photo and video app that means a filter the user likes, plus music and a theme. At that moment he shows a rating or purchase prompt.
He applied this to a photo and video app company he sold for seven figures. "If you wait too long, you lose them."
Mureta stacks value in steps with rising resistance. Like game levels, level one is easy and level two a bit harder. Enough resistance keeps users in a flow state until they reach the payoff, where he shows the trigger.
He calls it part science and part art, tied to brain chemicals like dopamine and oxytocin. Each app needs its own tuning.
He uses tutorials, timers and mini games to raise time in app. On an emoji app he put a game in front and an upsell on the back end. He updates his apps every five to seven days.
There is no magic bullet, he says. It is a constant machine of testing.
He spends the first 30 days collecting data. He tracks retention and lifetime value first. Bad ad traffic brings downloads who are not the right customer and skews the numbers.
"I'm in it for 30 days to get as much data as I can, and then I try to optimize."
3The apps Mureta builds, buys and keeps simple
Mureta picks utility niches that will last five or ten years. He favors photo, video, editing and music apps, and hard-to-build tools like PDF scanners and second phone lines. He avoids games because you have to be a gamer to understand them.
Hurricane trackers failed at first because the market was tiny. His test is whether a market will still exist in five or ten years. "I really want to own a segment, own a niche."
He studies competitors daily and models what works. He spends half an hour to an hour in the store every day, playing with apps and treating each category as its own silo.
A coloring book app gets more options and products, while a countdown timer adds urgency. Copying and reskinning alone no longer wins.
He keeps each app to one primary problem. Extra screens, buttons and benefits weaken an app. Mureta says friends make $80,000 a month with very crude interfaces.
He sees this in himself: his overbuilt apps usually do worst.
Mureta buys neglected second-tier apps and fixes them. Fixing something that exists costs less than creating something new, and he follows this model himself. A friend reached 10x revenue by adding short videos that teach users the app.
Big companies are already buying indie apps whose owners run no ads.
He treats an app as the top of a funnel. A friend's travel app with millions of downloads sells tours and guides instead of in-app content, which roughly doubled his top-line revenue.
Affiliate programs are another way to earn from the same traffic. The tour model suits normal times and fits less during the pandemic.
4Mureta's traffic and platform playbook
He launches with several traffic sources at once. He pushes traffic from his own existing apps, adds Apple search ads and Facebook ads, and has conversion assets ready. Until about six months before the interview he ran zero outside ads.
Now he invests heavily with a strong media buyer. He did the push-traffic move back in 2010. "Facebook will then optimize for you there."
He targets micro influencers with 10,000 to 100,000 followers. They have high engagement and don't overprice themselves. Sticker apps sold at $2 earned $10,000 to $20,000 from one smaller influencer, then tapered.
He would not build a business on this, since it is a one-time spike.
Mureta moves early on new platforms. Musically, before it became TikTok, worked well for gamers, and prices there are higher now. If a new thing takes off he rides the wave, and if not he moves on.
"Don't be afraid to be the first one, because if it does take off, you're going to be the first one."
He puts his time into iOS first, then VR. Google Play is not worth his time next to iOS, and he has done only a few partnerships there. He sees Facebook's Oculus as a bigger pot and wants to be early in VR as he was in apps in 2009.
He says the fundamentals carry over, so it is "amazing how much easier it is" now.
He keeps tweaking because channels always dry up. Some apps launched six years ago earn $20,000 to $30,000 a month with no updates, because owners fear Apple might pull them. Mureta says traffic, channels and algorithms all dry up eventually.
Tweaking is what separates a real business from a lucky one.
Chad Mureta's App Marketing Strategy (App Empire)
Chad Mureta explains how he now focuses on engagement, retention and lifetime value after the download, front-loads ratings before monetizing, and treats apps as real businesses. He says he is doing better in apps in 2020 than ever, and has sold eight companies for seven figures or more.
Mureta still runs on the 2009 fundamentals, not store tricks. He says some old ASO tricks have "definitely dried up" and Apple is catching on to keyword gaming. He says he still earns more now than ever, and that 2020 is better for him than any year before.
The core is understanding the marketplace, the monetization model and the demographic, not skinning a copy and hoping.
He knows his acquisition cost, retention and lifetime value. A real business knows what a user costs, how long they stay and what they are worth. Buyers want a predictable machine, not rankings that will vanish.
"A real business understands their user, they understand their cost to acquire the user."
Mureta builds every company with a sale in mind. His eighth million-dollar company had just sold when he spoke. He says there is a whole process to selling, which he planned to cover separately.
Subscriptions made his app income recurring and sellable. He cites about $50 a year, $10 a month or $5 a week. Recurring payers let buyers compute attrition and acquisition cost, and he says that adds "another zero" to a company's value.
He calls subscriptions the best thing he has seen in his business career, and says his success multiplied three, four and ten times. His e-commerce businesses struggle with inventory and complexity, while digital is "on fire".
He pairs his artistic side with analysis on purpose. Mureta finds data work boring but says it is needed to scale. An analytical business partner balanced his artistry.
"You have to be very analytical in this business if you want to grow and scale." He also says having no fallback forced him to make it work.
Mureta focuses on what happens after the download. So much effort went into the front end that the back end got little attention. He still wants conversion up front, then reads the data to raise time in the app and daily use.
Time in the app feeds the store algorithm.
He front-loads ratings and delays monetizing. The first call to action, right after the user gets something of value, is to rate. Once enough ratings are stacked up, he switches monetization on.
"I typically won't monetize in the beginning because I want to front load all my ratings."
Traffic volume decides when he monetizes. The wait can run from two weeks to two months. At 10,000 to 20,000 downloads a day, ratings stack up fast and he monetizes sooner.
If traffic is thin and he does not yet understand the user, he keeps optimizing: "If I'm not getting that, then I don't go too early."
He delivers value in the first minute, then asks. In a photo and video app that means a filter the user likes, plus music and a theme. At that moment he shows a rating or purchase prompt.
He applied this to a photo and video app company he sold for seven figures. "If you wait too long, you lose them."
Mureta stacks value in steps with rising resistance. Like game levels, level one is easy and level two a bit harder. Enough resistance keeps users in a flow state until they reach the payoff, where he shows the trigger.
He calls it part science and part art, tied to brain chemicals like dopamine and oxytocin. Each app needs its own tuning.
He uses tutorials, timers and mini games to raise time in app. On an emoji app he put a game in front and an upsell on the back end. He updates his apps every five to seven days.
There is no magic bullet, he says. It is a constant machine of testing.
He spends the first 30 days collecting data. He tracks retention and lifetime value first. Bad ad traffic brings downloads who are not the right customer and skews the numbers.
"I'm in it for 30 days to get as much data as I can, and then I try to optimize."
Mureta picks utility niches that will last five or ten years. He favors photo, video, editing and music apps, and hard-to-build tools like PDF scanners and second phone lines. He avoids games because you have to be a gamer to understand them.
Hurricane trackers failed at first because the market was tiny. His test is whether a market will still exist in five or ten years. "I really want to own a segment, own a niche."
He studies competitors daily and models what works. He spends half an hour to an hour in the store every day, playing with apps and treating each category as its own silo.
A coloring book app gets more options and products, while a countdown timer adds urgency. Copying and reskinning alone no longer wins.
He keeps each app to one primary problem. Extra screens, buttons and benefits weaken an app. Mureta says friends make $80,000 a month with very crude interfaces.
He sees this in himself: his overbuilt apps usually do worst.
Mureta buys neglected second-tier apps and fixes them. Fixing something that exists costs less than creating something new, and he follows this model himself. A friend reached 10x revenue by adding short videos that teach users the app.
Big companies are already buying indie apps whose owners run no ads.
He treats an app as the top of a funnel. A friend's travel app with millions of downloads sells tours and guides instead of in-app content, which roughly doubled his top-line revenue.
Affiliate programs are another way to earn from the same traffic. The tour model suits normal times and fits less during the pandemic.
He launches with several traffic sources at once. He pushes traffic from his own existing apps, adds Apple search ads and Facebook ads, and has conversion assets ready. Until about six months before the interview he ran zero outside ads.
Now he invests heavily with a strong media buyer. He did the push-traffic move back in 2010. "Facebook will then optimize for you there."
He targets micro influencers with 10,000 to 100,000 followers. They have high engagement and don't overprice themselves. Sticker apps sold at $2 earned $10,000 to $20,000 from one smaller influencer, then tapered.
He would not build a business on this, since it is a one-time spike.
Mureta moves early on new platforms. Musically, before it became TikTok, worked well for gamers, and prices there are higher now. If a new thing takes off he rides the wave, and if not he moves on.
"Don't be afraid to be the first one, because if it does take off, you're going to be the first one."
He puts his time into iOS first, then VR. Google Play is not worth his time next to iOS, and he has done only a few partnerships there. He sees Facebook's Oculus as a bigger pot and wants to be early in VR as he was in apps in 2009.
He says the fundamentals carry over, so it is "amazing how much easier it is" now.
He keeps tweaking because channels always dry up. Some apps launched six years ago earn $20,000 to $30,000 a month with no updates, because owners fear Apple might pull them. Mureta says traffic, channels and algorithms all dry up eventually.
Tweaking is what separates a real business from a lucky one.