Four tips for a successful software marketplace

Software marketplaces pose unique challenges and opportunities for companies.

When done right, third party developers bringing software to a marketplace can add immense value to a product, as seen with the iPhone.

The most popular marketplaces belong to organisations large enough to support multiple hardware options which run the same underlying software- the Google Play store for Android and the Apple App Store for iOS enjoy huge popularity.

A successful marketplace offers added value to the users of your core product. In an ideal world, developers will be able to craft a valuable contribution to your product’s functionality, and be rewarded in kind. However, attracting new talent to an emerging software marketplace can be tough. It’s a challenge that many companies working with third party developers will find familiar. It’s a chicken-and-egg issue: to attract developers, you need a thriving marketplace, but to have that you need developers in the first place.

An example of this problem was played out by Microsoft, who (despite high-quality hardware offerings and big scale) struggled to compete with Google and Apple in the smartphone game.

With Apple years ahead as pioneers of the app store model, and Google’s Android OS established as the main alternative, Microsoft’s smartphone business faced these challenges. As the original tech-giant, they’ve got plenty of traction with developers, but with so many third party developers already devoted to iOS or Android, it was hard for them to build up their app store to a point where it was an enticing prospect. Of course, there were other aspects behind Microsoft’s decision to move away from smartphones, but it illustrates a challenge of the software marketplace writ large.

So what can you do as a developer program manager to make your software marketplace a success?

  • Resources. Make them as accessible as possible. Make them thorough. Documentation, getting started guides, and support channels are all important resources to enable developers. Any downloads, like SDKs, should be easily reachable.
  • Messaging. Make sure that you’re telling the developer what THEY will get from being on your awesome marketplace.
  • Identify your developers. Really knowing the kinds of developers and organizations they work for is vital to make your communication accurate and efficient, and not put off your prospective developers.
  • Reduce Friction. Are there ways you can lower barriers to entry and business risk? Think about your onboarding process and your partnership terms.

While the dream is that one day your company will draw developers to you in search of riches, you have to recognize that as a company app stores and marketplaces are not in themselves profitable. The profit comes from the value-add they bring to your core offering.

Google and Apple only just break even running their app stores. Why? Because it takes a really strong developer program to maintain a great marketplace ecosystem, and good developer programs don’t just happen. It’s hard work, but it’s worth it.

A great developer program is part of what makes Apple the most profitable company in the world. They do it because the value that third party developers bring to their products is huge. In short- if you have a great marketplace supporting your core product, you stand to sell far more than you would otherwise. Behind every successful software marketplace stands a robust developer program.

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