By Laura Trethewey
Every table at Dark Horse Espresso Bar, a café favoured by Toronto techies, is crowded with MacBooks, each computer paired with a hunched-over person clutching a biodegradable cup of iced latte. Amid the glowing screens sit Ken and Garry Seto, brothers and co-founders of iPhone app startup company Endloop. Since recently quitting their day jobs and devoting themselves to app production, the pair has fit snugly into this community.
Before the Seto brothers joined the rapidly growing ranks of app entrepreneurs, they were colleagues at a government health site. “We thought, why don’t we just combine forces like we’ve doing for other people and do it for ourselves instead?” says Garry, now in his loft around the corner from Dark Horse. After quitting their day jobs in late 2008, the brothers worked part time on consulting gigs while they taught themselves how to build mobile applications. Garry, 33, the quieter of the two, does the complex coding. Ken, 41, designs the look and usability of the applications, along with Endloop’s website. By early July 2009, the duo decided to focus on Endloop full time.
An app company is a new breed of bootstrapping startup: overhead is low, so no venture capital is needed, making it a popular activity for amateur programmers who plug away in their basements. The Setos are Endloop’s only employees, but with their industry experience, they hope to make the venture into a long-term boutique-style firm. The pressure to make pro-quality products is immense; thee majoriy apps have less than 1,000 users, while in that competitive top tier (about 116 apps) each one has over 100,000 users. “If you get into the upper echelon” of designers, Ken explains, the opportunity for success is huge. “If you don’t, it’s dismal. There’s no in-between state.”
Endloop now has two apps to its name so far: its first effort, iHeartRate, which pulls in Starbucks and grocery money, and the latest, TweetCapz. This new app, born from one of Ken’s eureka moments, lets you take a photo and – uniquely – crop and instantly upload it to Twitter. (Perez Hilton’s job would have been a lot easier if this app existed a few years back.) “It could be a game changer for us,” says Ken, hoping TweetCapz will make enough to pay the bills.
Each app takes about a month working full-tilt to build. Garry, for one, is at his desk from 9 till 5, has dinner with his fiancé, then works until he falls asleep. “My fiancé said once that my Mac is my wife, my iPhone is my kid and you’ve got your whole family here.” There’s some truth to that. The Seto brothers are working full-tilt to capitalize on the app boom. “I wake up every day with a different idea,” says Ken. Although Endloop is the fourth company the brothers have worked at together, there’s still a hint of their sibling dynamic. “At first, there was a little getting used to each other,” Garry admits. Ken, classic older brother, corrects him: “That was years ago now.”
In the world of iPhone apps, there’s no such thing as moderate success: an app either earns tons of money or next to nothing. It was easier to get noticed when the App Store opened to independent developers in spring 2008. Steve Demeter, the now-legendary creator of the game Trism, announced earnings of US$250,000 just two months after the store opened. Today, apps that don’t appear on one of the store’s front-page lists (What’s Hot, Staff Favourites or Top Paid Apps) are unlikely to pull in much revenue. Of course, some developers get lucky: “If Apple decides that you made a good app, then you’re set,” Ken says, wistfully. “It’s like the hand of God touching down and saying that you’ll be successful and boom: you’re successful,” quips Garry.
The App Store is still an unruly marketplace, filled with loopholes and shysters looking to make a quick buck in the biggest tech gold rush since the dot-com boom. Since January, the number of apps in the store has doubled to 65,000, and some developers are desperate to stand out. Practices such as astroturfing (where a developer posts good reviews of their apps) are often seen. A developer can also ruin its competitor, posting dozens of bad reviews for a rival app. Add to that the confusing rules and regulations Apple imposes on developers. When an app is submitted to the store, it enters a purgatory of sorts. There’s no telling if or when an app will be approved (most app entrepreneurs wait three weeks to a month) and then, with little warning, the app appears on iTunes with none of the fanfare of a traditional launch. Or worse, it is rejected and a developer is back to redesigning the app and waiting in line again.
A day after we meet at the Dark Horse, TweetCapz hits the iTunes store with the less-than-an ideal launch on a Saturday night. To compensate, the boys start promoting immediately: Ken posts TweetCapz of whatever he’s doing (eating cake, attending tech events, demoing videos) while Garry uploads the first reviews to the web. There’s no break, even after the app is completed. Garry, jovial, but tired, says, “It’s a lot of late nights and long weekends.” U