How does an entrepreneur go from developing mobile games to building the world largest independent app store? I speak to the founder and CEO of GetJar- llja Laurs.
GetJar is the world's largest free app store with over 2.5 billion app downloads to date. The company distributes over 150,000 mobile applications across a variety of operating systems.
Below is the full interview
Can you give you some background information about yourself, were you the entrepreneurial type growing up?
I grew up during the collapse of the Soviet Union when buying even the basics, like toilet paper, was a great challenge. So as a kid, lacking any pocket money, I learned pretty-early to take care of myself. The first business, at the age of 6-7, collecting empty glass beer bottles on the beaches and trading them for money in the recycle points, was both profitable and ‘eco’J. The best ‘harvest’ was Sundays mornings between 5am-6am as there was a lot of ‘work’ (and money to be made!) after the previous day’s parties.
What were you doing before you founded the company?
I started the company straight out of the university; however by the time I formally started the company I’d done a lot of things, from selling copies of Bruce Lee posters in the school, to copper recycling, to tutoring kids English (after I returned from the US where I studied as an exchange student).
Tell me how the idea for GetJar came about?
Initially it wasn’t meant to be a business. We were developing mobile games and came across a testing problem. There were hundreds of devices on the market that we needed to test our apps with, but we couldn’t afford to buy them all. So the idea was to publish our beta apps so that anyone could download them for free - we only asked them to tell us whether our app worked on a specific device. We opened this crowd-sourced testing service to both testers (who were able to get apps for free in exchange for testing) and developers (who were able to test their apps with the community at no charge). Soon, the community exploded and we realized a business opportunity.
What is GetJar?
We are world’s largest independent app store, with over 2.5 billion app downloads to date.
What are you trying to solve with GetJar?
Back when app distribution was entirely controlled by carriers, we created an open, independent, off-deck app distribution destination for developers and consumers. Today, we continue building an independent cross platform app distribution channel.
Talk me through the first few months of running the business? What would you say was the hardest part of starting the business?
In my specific case, ‘launching’ the company was a very gradual process that took a year or so (while combining this with studying) - unlike businesses that are established now. After formally registering the company, I was doing part-time consultancy (web pages, e-commerce, etc.), rented the first office in about six months, hired the first employees in about 8 months, etc. As with anything, the most difficult part is to start, after a while you build experience, clientele, get to know your domain, etc.
How were you able to fund the business?
In my part of the world (Lithuania), VC funding was totally unknown when I was starting the business. So it was all very simple – you either are profitable from day one, or you’re out of business. I only started to take salary when there was enough money to pay for accounting and other overheads and only rented an office when there were a constant flow of consultancy projects, etc.
How has your market changed in the past few years? How has your business changed to keep pace?
One of the biggest changes in our industry was the launch of the native app stores - first Apple’s, then Google’s and so on. On the one hand, with the rise of the smartphone, the market became much bigger; on the other hand, the competition became harder. But unlike all other players who have retail-based business model for apps, we’re innovating with a paid discovery model. Instead of selling apps to consumers, we sell sponsored listings in the app store, which allows us to split ad dollars with developers and make available paid-apps to consumers, for free. It’s just like radio compared to a CD store – you have to pay for music in the CD store but can listen to the same songs on the radio for free because advertisers pick up the bill.
Would you say the initial idea for the company, or that your business model has changed since starting the company?
Indeed the model has changed a lot – from originally developing mobile games through a beta testing community, we evolved the business into an app store.
What would you say has been some of the most crucial that you've done to build the company to this level now?
Expanding beyond Lithuania where we originally started has been the most difficult, but together the most important event in the company’s history. Unlike other companies who outsource development to Eastern Europe for cost efficiency, I’ve made a decision to build development in Silicon Valley, because of the quality of the people here.
Is the business profitable? What is your business model?
Unfortunately we’re not disclosing any financial aspects of the company; this is a common policy for non-public companies. However the business model, based on selling sponsored listings in an open auction (just like in Google’s Adsense) proves to be very powerful.
What’s been your most memorable moment so far on your entrepreneurial journey?
Probably the first call from Accel (VC). At that time I had no clue what VC stood for or how they could be useful to the business, so it was a rather funny introductory phone conversation.
What pieces of advices could you give to aspiring entrepreneurs out there?
As I talk to students who want to be entrepreneurs, I am often asked what personality features are the most important for a successful entrepreneur. Intuitively you’d think it’s leadership-skills and talent, etc. Based on my experience, only two things really matter. First, it’s about a high tolerance to risk. More than anything, starting a business is accepting the risk of the failure (which statistically is 90% for any new initiative). Those who cannot tolerate risk and prefer a comfortable, predictable life will not be happy as entrepreneurs. Second, it’s about being able to bear a high-degree of responsibility. Unlike with most nine to five jobs, running your business is about bearing responsibility for every aspect of it - without the luxury of support from an established organization. Responsibility to your partners, clients, investors, but mostly to the people who work with you.
What can we be expecting from you and GetJar in 2012?
A big thing we’re launching this year is ‘GetJar Gold’ virtual currency – a first of its kind. The currency will be backed by the marketing spend as opposed to the consumer spend. Delinking the virtual currency from real money will allow us to offer both consumers and developers a billing platform, with the user experience and simplicity never seen before. What’s more important is the linking of the currency to ad dollars will allow us to further improve our platform as a free app store.