Editor’s Note: Matthieu David, from Daxue China Market Research ( Linkedin and Twitter), a market research firm focusing on China based in Beijing and Shanghai, has interviewed Betrand Schmitt, App Annie CEO on September 30th for TechNode.
App Annie was launched as a free service in 2010, and the company was founded in 2011 by Bertrand Schmitt. It provides three main services, including analytics, store stats, and business intelligence. These products provide publishers with data on downloads, rankings, revenue, reviews, and more to help them learn about the performance of their own and competitors’ apps. App Annie has recently raised 15 million USD with Sequoia Capital as lead investor, for a total of 22 million USD raised as a total since the start.
In this interview, App Annie’s CEO is talking about the start of App Annie and his previous experiences in other companies and what can increase your chances of success at the very beginning of a start-up.
Q: So you have been previously working in Gomez, Zandan, Neocom, and Arkadia? You have been in the founding team of Neocom and Arkadia, right?
A: Founding team? Not on Neocom, but Arkadia, yes, I was the co-founder, and for the rest, I was not on the founding team.
Q: Ok, so it was the second startup you have launched, App Annie?
Q: How did the name come about?
A: So that’s a good question, it was App Nanny, as in somebody that would take care of your app, (metaphorically speaking), but we decided it was not fun enough so we changed it to App Annie, to make it warmer and more personal.
Q: That makes it quite international.
A: Yes, that was the idea. Initially, it was started as a project by another company and I took it over 2 or 3 months after the launch to make it a separate entity, make it a real separate business.
Q: I went through your experience and before App Annie, you worked on the analytics of apps, right?
A: Yes, at Zandan and Gomez, it was not apps at the time, there were not many apps, it was more mobile web. Here we measured, analytics is about measuring, so we were measuring very different things about operations and IT, to understand the performance in terms of speed, in terms of the quality of mobile web site and we measured that automatically from different locations in the world.
So I did that from 2005-2010, for two companies, Zandan and Gomez. Zandan was just for mobile web, which was a very tough business at that time, but Gomez was focused initially on the web and asked me to lead their new mobile effort.
Q: They were in China?
A: No, Zandan was based in France and Gomez was headquartered in the US, in Boston, and we had a big team in China in terms of engineering. In terms of people, we had 220 people in US and 18 in China. China was basically focused on engineering while the US version was senior engineering, operations, and marketing products. 75% of business was in the US. And it started in Boston, so a very American company.
Yes, pretty different. And for Gomez, I started in the US and was based in China and my users/customers were mostly Americans, so I was commuting back and forth.
Q: Talking more about starting a business, what about the first year when it’s survival? You said App Annie was incubated in another company. How do you make it work in the beginning? How do you get your first clients?
A: Yes, we were incubated by another company. Incubation might have different meanings, but I think it was good because it was only a 4-5 people team inside a company that was more like 80 people. We had all the facilities in terms of water machine, coffee machine, rest areas, so it was a nice office space. Not as nice as this one (App Annie’s), but it was nice enough to attract the first people.
It kept us really focused on just the product, which was important initially. The product was free, and we then tried to get our first customers step by step.
I’m not advocating that the project start from another company, you can do your own project. But I think an incubator makes you feel part of a bigger group and gives you other people to talk to at other times, not just your very small team. You can already feel like a larger company. I think that makes it easier in a way that we didn’t start in a garage or in a dormitory. I’m not saying it’s wrong, but it makes it easier to start like this. At some point we began to organize ourselves differently, we got a new office space because it was not large enough for us anymore. It was at around 15-20 people that we changed office space.
Q: When was it, after 6 or 9 months?
A: I think we spent quite some time there, because we moved in our new office space in May 2012, so we keep using this office space for quite some time.
Q: Two years, right?
A: Yes, at some point we outgrew the space and wanted to have our own. It was great initially, but then it’s important to live by your standard, not somebody else’s standard. But it was more like when we were 15 people that we started to outgrow this.
Q: So, you would say that what helped was to be incubated and to be focused. So at the beginning were you focusing on specific metrics?
A: We were focused on making the free product better and building our paid product. It was good to just focus on that and not take care of other things. I think that being able to focus is important. It was definitely a different organization, but I think that we have grown with the market. Some customers have been big from the beginning, like Electronic Arts, but some have grown with us. Definitely we have grown with the market.
In a way what we were providing initially was good enough, but the more users were becoming sophisticated, the more they wanted. They value and understand more what you have to provide.
In a way our goals were similar with the growth of the industry, becoming more and more advanced and providing different services.
Q: Who was your first client?
A: It was a consulting company buying it for a hedge fund.
Q: It was in China?
A: It was a hedge fund in New York and the consultancy was doing work for them in China. So this was not typical. We have more hedge funds, but for the first year it was our first and only hedge fund. It was not typical, and it is an important but still minor segment of our business now. It is interesting that step by step, it has been apps publishers, especially of games, that became bigger among our customers.