Tolu Akinola created a Shopify App in 2017 called Delivery Date. It is a Shopify App that enables customers to select a date for delivery of their order during checkout. Tolu recognized that there was frustration in the Shopify world where orders were not arriving on time from select merchants and customers were not happy about it. Tolu, a man passionate for tackling all sorts of challenges, decided to develop an app and create a solution.
Creating a Shopify App in the Delivery Niche
Tolu knew how to develop an app from past experiences that had gained traction, but he had never done so on the Shopify platform. He never had any intention of creating something commercial and just wanted to freshen up his computer programming skills. He went online to Shopify forums and read Shopify merchant complaints. What did he find? Many of them were frustrated with the inefficient delivery process.
“You want to make sure you are building something that people want. This is fundamental and it is what matters most. If no one is using it and no one wants to pay for it, you will not have a successful product.” Tolu knew that from a foundational standpoint, if you do not have an app idea that will be happily adopted by customers, you are wasting your time. That is why he spent so much time on the Shopify merchant forums and reaching out to merchants separately to confirm that this was something they would want to integrate into their Shopify platform.
Building the first version of the app and testing it while having it live on the Shopify App store was another key part of his success. Tolu knew that to get to a good state, you had to be willing to fail from the start. “Sometimes I see entrepreneurs who are scared about launching something because they feel it is not perfect. But I believe this is the only way to success.”
To establish the pricing plans, I did market research on the app store. I wanted to see not only what people were paying for things related to the delivery of their order, but also just pricing plans on apps in general.
Deciding on a Lucrative SaaS Business Model
The key component to how a SaaS company makes money is through the SaaS business model that they choose. It is no different when you develop an app for the Shopify App store.
When Tolu was deciding which pricing plan to use for his Shopify App, he started by doing market research in the app store. Whether you decide to build a Shopify App or not, market research is the key first component when deciding on your SaaS business model. Tolu set out to find what people were paying for things related to the delivery of their order, but also pricing plans on apps in general.
Tolu noticed that a lot of apps ranged from being free (a freemium model) to being in the $10-$20 range. He decided to land on using a freemium model and a $20 monthly subscription fee.
As he started to build out the app and grow its usage, he realized it wasn’t lucrative running a business while only getting $20 a month from his customers. He quickly noticed that he would need a lot of money to be able to keep the company running at this price. Everyone on this service was requiring customer service of some kind and running customer support on a freemium and $20 a month subscription model was not cutting it. Tolu did not have the time to grant the customer service that was required of him, so he decided to scan out a different pricing tier.
Tolu ran into a glitch in the system when he realized he didn’t have time to write the code that stopped users from using paid features that were on the freemium model, so he had to readjust his entire thinking around the pricing plan. He had to sort through these questions: what are the features that need to be on the paid version versus the freemium version? What are the minimum feature sets that people would use? He wanted to see people move from the freemium model to the $20 a month subscription and those on the $20 subscription plan to be moved to a higher tier plan. He landed on $50 dollars as the pricing plan for the premium features. He realized that it was best to identify these holes in the pricing plan early on to identify how to keep the app worthwhile for customers while also having the ability to grow it at a sustainable rate.
He explained that when you develop an app, specifically a Shopify app, if you raise the pricing plans you will still get a substantial amount of interest. Even if the interest decreases, it balances out because you have time to devote to the higher-paying customer. If you almost triple the prices, like in Tolu’s case, but have a third less people, you still make the same amount of money but receive a third less support calls.
Tolu went on to say that Shopify has many different segments of merchants on deck. Some that are there to just make a little bit of extra money and those that are earning what he called their “bread and butter.” The ones that were just trying to make extra money decided that the higher pricing plan for Delivery Date wasn’t a worthwhile investment for them that most people were not willing to upgrade to higher pricing plans. But the merchants who were established business owners knew that the app was worth their money.
Delivery Date continued to gain traction as a Shopify app and more merchants began to adopt the platform in their online space. However, when it came to having the time to scale and grow the business, Tolu didn’t have the capacity. He had other projects that were more profitable that took up his time, so Delivery Date only had his attention for a few months out of every year. Even though Tolu was passionate about Delivery Date and loved seeing its organic growth, he knew that he was in a place where he didn’t have the time, resources, or energy to continue to invest.
Although Tolu knew it was time to divest of Delivery Date, he beamed with pride when he explained how exhilarating it was to develop an app that sprung up from a simple concept, he decided could save a lot of aggravation for customers and merchants alike in the Shopify space. He built Delivery Date entirely on his own accord and was able to successfully develop a Shopify app with little time and effort.
He spent three years modifying the app, basing the modifications on customer feedback, then decided to divest of Delivery Date through an M&A advisor, FE International in the spring of 2021.
Tips to Keep in Mind to Develop an App for the Shopify App Store
If you are interested in creating a unique Shopify App like Delivery date, here are a few quick tips for the process based on Tolu’s experience:
Determine whether your app will be useful
Read Shopify Merchant forums to see what challenges they are facing. Once you have established the problems they are running into, figure out which you are most passionate and capable of solving. In Tolu’s case, he knew that he could easily create coding for a Delivery App.
Figure out what your features will be
Determine which features you will need to offer Shopify Merchants from your app to be successful. One way to do this is to reach out and do market research among Shopify merchants. Tolu reached out directly to Shopify Merchants asking if they would be interested in the product and if they would be willing to be a part of beta testing.
Establish how long it will take to build
Determine a realistic timeline for how long it will take you to build the app but be weary of waiting forever to put out the first version. Tolu knew that his success would come after the first version of his app was built and downloaded by users. He was then able to successfully get rid of any bugs and add any customer feedback he was getting in real time. It is okay for a first version of an app to not be perfect, there is room for trial and error in the initial stages, especially when you are creating something that is improving the livelihood of Shopify merchants whose lives truly depend on the success of their business.
Use Shopify tools and resources
Shopify has a few app-building basics and best practices to note while building a Shopify app. You will need the following: a Shopify Partner account where you can build, review and fix your apps, an ngrok account and you will need to be familiar with development stores. You will also need to be able to code in any type of backend programming language. Shopify lays out a general overview of all the steps you will need to follow to build an embedded app.
Watch your app traction and business insights
Once you have developed your app, had it approved by Shopify and are ready to start scaling and gaining traction, make sure you stay aware of your business insights. It is important to be data-driven and understand how your app is doing. Continue to monitor whether your SaaS business model is lucrative and whether you are on top of your customer feedback.
Decide When it is Time to Sell your Niche App
Like in Tolu Akinola’s case, your business service is extremely lucrative, but you’ve hit your organizational and technical limit. You are in a niche market and you have a product, but you know you don’t have the capacity to grow it to the next level. Your SaaS is building momentum. You’re ready to scale, but the thought of bringing on a marketing, sales and support team exhausts you. You were invested in the business when you were running off the fumes of an exciting entrepreneurial venture, but you know it’s time to move on. You feel that your next venture awaits you on the other side, but you aren’t sure if your business will land in the right hands. If you resonate with any of the following it might be an indicator that it is time for you to sell your SaaS business. Selling your business will free you up with enough capital to move on to your next exciting venture while resting assured that your company is scaling efficiently in the hands of another excited investor. The right brokerage will assure the morale and reputation of your company will be maintained by spending hours of due diligence so you can have total confidence that your options are legitimate.