What's New: Epic vs. Apple

(from the latest issue of the Indie Hackers newsletter)

A US federal district court ruling means changes for the App Store:

• Apple can no longer prevent App Store developers from directing users to other payment systems, effective December 9. This allows makers to create more attractive and accessible purchasing avenues for now, but many expect Apple to appeal.
• From startup reads to marketing reads, here's a list of books that indie hackers love the most. Grab one and get your read on!
• Founder Derek Homann bootstrapped and sold his first SaaS company, and has now raised $3.5 million for his second. Here's his secret to selling quickly on MicroAcquire.

Want to share something with nearly 85,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

🥊 Epic vs. Apple

from the Indie Economy newsletter by Bobby Burch

In a purported win for indie hackers, a US federal district court ruled that Apple can no longer prevent App Store developers from directing users to other payment systems, allowing makers to circumvent Apple’s 30% cut. Here's what this means for indie hackers.

Apple battle

The background: Fortnite creator Epic Games filed suit against Apple in August 2020, accusing the world’s most valuable company of antitrust violations. Epic claimed that Apple's requirement for all mobile apps to go through the App Store is a monopoly, and that the 30% fee that Apple takes from all in-app payments violates the US Sherman Act. Alongside filing its lawsuit, Epic taunted Apple by offering users the option to purchase virtual currency within the Fortnite app, which resulted in Epic being banned from the App Store.

What’s happening: In Epic Games v. Apple, US District Judge Yvonne Gonzalez Rogers ruled that Apple isn’t a monopoly. She did order, however, that Apple must allow App Store developers to provide users with other payment options. This enables gamemakers to bypass Apple’s 30% fee, and to keep more proceeds from their users’ in-app purchases. Starting on December 9, Apple must allow gamemakers to offer alternative payment options unless the ruling is halted by a higher court. The ruling reads, in part:

[Apple is] permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.

Taunt too far: Epic must repay Apple the $3.5M it collected from users’ in-app purchases when the gamemaker offered its alternative payment system in 2020. It’s a tiny price to pay to win a larger battle, especially considering that Epic Games generated about $5.1B in 2020.

What it means for indie hackers: Indie game developers have a lot to smile about with this court ruling. While there’s no guarantee that gamers will opt for alternative purchasing methods, developers can provide all types of alternative payment options to users that eliminate Apple’s steep commission. Developers can create more attractive and accessible purchasing avenues, offering a better experience.

Appeals ahead

A bite out of Apple: Gaming represents a large portion of Apple’s App Store revenue, 70% to be exact. Apple raked in about $15B from its App Store in 2020, which was more than 20% of the company’s total profit for the year.

Boon for crypto wallets? The ruling means that any iOS app can link to an external digital wallet. That could benefit crypto wallets like Exodus and Mycelium, or prompt other finance businesses to create in-game wallets.

What’s next: Epic Games is appealing the court’s ruling, as the gamemaker still wants Apple to be declared a monopoly. Apple is considering appealing the ruling as well, but has yet to do so.

Apple's still Apple: Regardless, Apple has the broad legal authority to change its App Store rules, which means that the suit may not be the complete victory that some hope it to be. As The Verge points out, Apple has many options to discourage outside payments without restricting them outright.

Antitrust looms: Apple isn’t out of the monopolistic woods yet. Congress is eager to curb Apple, Facebook, Google, and Amazon’s power via new antitrust regulations. In early 2021, US Senator Amy Klobuchar introduced the Competition and Antitrust Law Enforcement Reform Act, which would make it more difficult for big tech to pursue mergers and acquisitions, and would beef up antitrust enforcement.

What do you think about this court ruling? Share below.

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📰 In the News

from the Volv newsletter by Priyanka Vazirani

💲 Crypto fans are turning to crypto lenders to buy more.

🚫 This firm helps CEOs avoid getting cancelled.

🏙 This billionaire unveiled a plan for creating the "most inclusive" city in America.

🗓 Scotland will trial a four-day workweek, following Spain and Japan.

🚬 People are using DIY ketamine therapy to quit smoking.

Check out Volv for more 9-second news digests.

🤓 Top Reads for Indie Hackers

by James Fleischmann

Looking for some good books to up your game? Here are indie hackers' top picks!

Startup books

• Zero to One: Notes on Startups, or how to Build the Future, Peter Thiel and Blake Masters: This is the single most recommended book on Indie Hackers!

• Rework, DHH and Jason Fried: "Read [this] and you'll know why plans are actually harmful, why you don't need outside investors, and why you're better off ignoring the competition."

• The Lean Startup, Eric Reis: "Shorten product development cycles, measure actual progress without resorting to vanity metrics, and learn what customers really want."

• The Personal MBA: Master the Art of Business, Josh Kaufman: "Distilling the core principles of business and delivering them quickly and concisely to people at all stages of their careers."

• The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers, Ben Horowitz: "Navigating the toughest problems business schools don't cover."

Maker books

• The Maker Movement Manifesto: Rules for Innovation in the New World of Crafters, Hackers, and Tinkerers, Mark Hatch: "Covering the remarkable technologies and tools now accessible to you, and stories of how ordinary people have devised extraordinary products."

• The War of Art: Winning the Inner Creative Battle, Steven Pressfield: "A guide to inspire and support those who struggle to express their creativity."

• Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It, April Dunford: "How to find your product’s secret sauce, and then sell that sauce to those who crave it."

Marketing books

• This Is Marketing, Seth Godin: "Great marketers don't use consumers to solve their company's problem; they use marketing to solve other people's problems."

• Growth Hacking: Silicon Valley's Best Kept Secret, Raymond Fong and Chad Riddersen: "Empowers any business to apply growth hacking."

• Traction: A Startup Guide to Getting Customers, Gabriel Weinberg and Justin Mares: "We cover every possible marketing channel you can use to get traction, and show you which channels will be your key to growth."

• Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers, Geoffrey A. Moore and Regis McKenna: "Bringing cutting-edge products to progressively larger markets."

• Badass: Making Users Awesome, Kathy Sierra: "Craft a strategy for creating successful users."

Bootstrapping books

• Zero to Sold: How to Start, Run, and Sell a Bootstrapped Business, Arvid Kahl: "Zero to Sold is the ultimate business documentation: A memoir, a manual, a journal, and a guide."

• Company of One: Why Staying Small Is the Next Big Thing for Business, Paul Jarvis: "By staying small, one can have freedom to pursue more meaningful pleasures in life, and avoid the headaches that result from dealing with employees, long meetings, or worrying about expansion."

• The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future, Chris Guillebeau: "Lead a life of adventure, meaning, and purpose, and earn a good living."

• Start Small, Stay Small: A Developer's Guide to Launching a Startup, Rob Walling: "A step-by-step guide to launching a self-funded startup."

Productivity books

• Indistractable: How to Control Your Attention and Choose Your Life, Nir Eyal and Julie Li: "Indistractable reveals the key to getting the best out of technology, without letting it get the best of us."

• Deep Work: Rules for Focused Success in a Distracted World, Cal Newport: "A rigorous training regimen, presented as a series of four rules, for transforming your mind and habits."

• Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones, James Clear: "Practical strategies that will teach you exactly how to form good habits, break bad ones, and master the tiny behaviors that lead to remarkable results."

Miscellaneous books

• Start with Why: How Great Leaders Inspire Everyone to Take Action, Simon Sinek: "In studying the leaders who've had the greatest influence in the world, Simon Sinek discovered that they all think, act, and communicate in the exact same way."
• Grit: The Power of Passion and Perseverance, Angela Duckworth: "Here's why talent is hardly a guarantor of success."
• Antifragile: Things That Gain from Disorder, Nassim Nicholas Taleb: "A blueprint for how to behave and thrive in a world we don't understand."

What are your favorite books? Please share in the comments!

Discuss this story.

🛠 Building in Public: Show Behind the Scenes

by Ivan Romanovich

Most of the work on the product is not visible to customers, but this doesn't mean that it should not be shown.

Discuss this story.

💰 Derek Homann On Selling SaaS

by Derek Homann

Hello! I'm Derek Homann, and in 2017, my business partner and I left our jobs to start Median, a screen share customer support tool. It took us six months to get our first paying customer. We bootstrapped the business for just over three years, and hit $10K MRR before selling it on MicroAcquire in late 2020.

Now, we've started a new company, Workshop, a tool that helps streamline internal communications. We've raised $3.5M so far to take a bigger swing.

AMA!

How did you know it was the right time to sell your business?

We just wanted to start working on something else. It was just time to let a new owner take it and run with it. We ended up selling for 4x our top-line revenue, which was our asking price. The acquisition price was less than both perpetual licensing deals we did. We like to joke that we actually sold the company three times in under a year!

We had wrapped up one of the two large perpetual licensing deals we did, which was basically an exit without actually exiting the company. After that, I came across MicroAcquire, and saw how easy it was to list a company for sale. Both my cofounder and I had gone back and forth between letting Median cash flow in the background for us versus just selling it entirely. Since MicroAcquire made it so easy to list, I put it on there to test the waters; we got a ton of interest almost immediately. I exchanged messages with a bunch of interested parties, had Zoom calls with probably 10, got verbal offers from three or four, and eventually took the deal from the buyer that gave us the best combo of price and payout structure.

How long did the entire process take to sell on MicroAcquire?

Not long at all. Probably two weeks of talking to buyers to get a term sheet, another 30 days or so for due diligence and finalizing all the smaller points of the deal, and then the money hit the bank.

It can definitely take longer, so my advice would be to set deadlines for stuff to get done. I was very clear upfront that we were working on another business already, and my goal was to get a yes or no as quickly as possible.

Best advice for working with a dev agency?

Having a dev agency build your product can be very tricky. It has clearly worked for some people, but having a technical partner whose sole job it is to iterate on the product made it much easier for us to make fixes, adjust to user feedback, and get a deep understanding for what problems we were trying to solve for.

So with that said, I would say having an agency build the MVP isn't ideal, but if it's your only option, I would try to pre-sell as much of your product as possible.

How did you validate your idea?

I'd be lying if I said we spent much time validating the idea. I knew that there was a need because it was something that my previous customer support teams could have used. I also saw that there were several co-browsing companies who came before us, and all of them had been acquired. I felt that was a fairly decent signal, and made it a little easier to compete as a bootstrapped company since it was a niche product with not a ton of active players.

It also wasn't some tech that a big company like Zendesk could replicate in a month by throwing 20 devs on it. So our theory was that they would either want to offer us as an integration in their app store, white label us directly so that they could offer it as a native feature in their product, or just try to buy us.

All three of those things become true eventually. We had app store integrations with Intercom, Live Chat, and a few others. We also white labeled co-browsing for Olark and a few other chat providers, and then eventually we had a company wanting to buy us to complement their existing product.

Lastly, neither of us ever made enough money with Median to replace our current salaries, but we did start taking small salaries about 18 months in. After we did our two large perpetual licensing deals and the acquisition, the money we made from that more than made up for the salaries we left, and then some. It also helped to work with a tax advisor to ensure we maximized our take home money.

How much time did you spend marketing vs. developing?

I think we were actually pretty bad at marketing. Our team was just two. I did sales and marketing, and my partner wrote all of the code. We did bring in a contract developer for a few months at one point as well, but for the most part, it was 50% development and 50% trying to acquire users through cold outreach and participating in customer support communities.

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

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Special thanks to Jay Avery for editing this issue, to Nathalie Zwimpfer for the illustrations, and to Bobby Burch, Priyanka Vazirani, James Fleischmann, Ivan Romanovich, and Derek Homann for contributing posts. —Channing