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um... hate to bust everyone's bubble but a $1m bucks a month is not alot of money for a 20 person or so business.
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@d5280: Yeah, they're only making 600,000 per person a year. Not a lot of money at all, obviously.
Dude, seriously, shut up. Reply
Dude, seriously, shut up. Reply
@d5280: ummm lets see, lets make people satisfied giving them 10k, by 20 = 200k, that keeps the company 800k/month and its just a 1 year old company, what do u think?
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@d5280: For a young 20 employee company that is awesome.
Revenue at a rate of 12MM a year for a young small tech startup is great, even after taking out whatever Apple's margin is. The marginal cost of each extra unit sold is really small, so their margin per unit gets higher and higher the more they sell.
This is especially true when you think about the fact that most tech startups don't recoup their initial investments (servers, computers, software, leases) for a lonnnnng time.
I generally don't like the iPhone and would probably never pay a dime for apps, but you gotta give these guys some props. Reply
Revenue at a rate of 12MM a year for a young small tech startup is great, even after taking out whatever Apple's margin is. The marginal cost of each extra unit sold is really small, so their margin per unit gets higher and higher the more they sell.
This is especially true when you think about the fact that most tech startups don't recoup their initial investments (servers, computers, software, leases) for a lonnnnng time.
I generally don't like the iPhone and would probably never pay a dime for apps, but you gotta give these guys some props. Reply
@d5280: Not sure what theyre margins are and their costs but 12 million a year is pretty damn good for a small business.
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@d5280: Yeah, that's only, uh, $600k a piece, probably $300k per before taxes. Screw that, I'm holding out for a real paycheck.
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@d5280: that's ridiculous. Yes it is a lot. I consider my company to be pretty awesome at about 3m/yr with 6 employees and very little overhead. They have the same, very little overhead cost (programmers, support, and finances).
You do realize $700k/month in income goes a long way when the average salary of each employee is likely around $50k which comes out to $84k/month in payroll. Add in another $100k in additional expenses (insurance, technology, office space, etc) and you're still in profit over $500k/month. I'm not sure what planet you're from but that's not only wild and more than 99% of ALL businesses make but it's also outstanding for a company that started from selling iphone games. Reply
You do realize $700k/month in income goes a long way when the average salary of each employee is likely around $50k which comes out to $84k/month in payroll. Add in another $100k in additional expenses (insurance, technology, office space, etc) and you're still in profit over $500k/month. I'm not sure what planet you're from but that's not only wild and more than 99% of ALL businesses make but it's also outstanding for a company that started from selling iphone games. Reply
@d5280: Okay... I don't claim to be an expert in business, but let's do some Math, shall we?
First of all - people saying that $1M/mo = $50k/mo per person... well that's ridiculous. they know nothing about business.
However, let's look at what costs a company like that would really even incur. The only initial disbursements they'd really have would be for:
*computers to develop on,
*iPod Touch and/or iPhones,
*developer licensing fees (minimal)
*business licensing fees
*dues to record companies, etc. (moderate)
*Maybe some office space (optional even, at this size with this type of company - 20 ppl could work from home and collaborate as necessary)
*Advertising (can be pretty costly - though with these Apps, Apple has seemed pretty eager to show them off)
there's probably lots of other stuff I'm leaving out... but most of all these costs are one-time startup costs, and the rest are fixed period costs (that don't go up on a per-unit-sold basis). Also, the direct labor involved is minimal, and pretty much limited to the initial development of the Apps. Direct materials are, well, zero.
The point is this. In the business world, this is a business that requires ridiculously little initial capital to start, and the business is ridiculously inexpensive to run and maintain. The per-unit contribution margin ratio (purely profitable percentage of sales revenue) is ridiculously high, and growing as more units sell.
Now if you're an employee for this company, you're getting paid ridiculously well for pretty much only having to initially conceive, design, and code a few iPhone apps... then provide minor updates here and then, perhaps answer emails (if that 20-employee number doesn't already include designated customer support people) etc. And let's say you're only (ha, only) getting paid $100k a year to do that. That's dang good for a fairly simple programmer job. Also, you could most likely have a whole other full-time career elsewhere, and just do this on the side. Bottom line, you're doing well.
Now, from the business' perspective. $100,000/yr per employee is less than $200k/month combined for all 20 employees out of the $1M/mo in sales revenue - that's around 16% of total monthly sales revenue going towards salaries... and that 16% can provide a payout of around $10k a month to employees. now let's double that. $200k per year per employee Even at 33% of sales revenue going towards employees... a pretty high number... you're still raking in a ton of money in profits for the company - especially considering the fact that your other fixed period and overhead costs will pretty much all go down after the initial costs at the time of business inception, and that your variable costs (the amount it costs to produce your apps - per app sold) are plummeting like crazy as sales volume increases....
Okay well... I'm no business expert, in fact I just finished my first Accounting course ever, but I feel like this has been a pretty reasonable effort at analyzing this business realistically. Hopefully anyone who has read this far will have gotten the point: this is a profitable business. To say otherwise is to speak in ignorance. Reply
First of all - people saying that $1M/mo = $50k/mo per person... well that's ridiculous. they know nothing about business.
However, let's look at what costs a company like that would really even incur. The only initial disbursements they'd really have would be for:
*computers to develop on,
*iPod Touch and/or iPhones,
*developer licensing fees (minimal)
*business licensing fees
*dues to record companies, etc. (moderate)
*Maybe some office space (optional even, at this size with this type of company - 20 ppl could work from home and collaborate as necessary)
*Advertising (can be pretty costly - though with these Apps, Apple has seemed pretty eager to show them off)
there's probably lots of other stuff I'm leaving out... but most of all these costs are one-time startup costs, and the rest are fixed period costs (that don't go up on a per-unit-sold basis). Also, the direct labor involved is minimal, and pretty much limited to the initial development of the Apps. Direct materials are, well, zero.
The point is this. In the business world, this is a business that requires ridiculously little initial capital to start, and the business is ridiculously inexpensive to run and maintain. The per-unit contribution margin ratio (purely profitable percentage of sales revenue) is ridiculously high, and growing as more units sell.
Now if you're an employee for this company, you're getting paid ridiculously well for pretty much only having to initially conceive, design, and code a few iPhone apps... then provide minor updates here and then, perhaps answer emails (if that 20-employee number doesn't already include designated customer support people) etc. And let's say you're only (ha, only) getting paid $100k a year to do that. That's dang good for a fairly simple programmer job. Also, you could most likely have a whole other full-time career elsewhere, and just do this on the side. Bottom line, you're doing well.
Now, from the business' perspective. $100,000/yr per employee is less than $200k/month combined for all 20 employees out of the $1M/mo in sales revenue - that's around 16% of total monthly sales revenue going towards salaries... and that 16% can provide a payout of around $10k a month to employees. now let's double that. $200k per year per employee Even at 33% of sales revenue going towards employees... a pretty high number... you're still raking in a ton of money in profits for the company - especially considering the fact that your other fixed period and overhead costs will pretty much all go down after the initial costs at the time of business inception, and that your variable costs (the amount it costs to produce your apps - per app sold) are plummeting like crazy as sales volume increases....
Okay well... I'm no business expert, in fact I just finished my first Accounting course ever, but I feel like this has been a pretty reasonable effort at analyzing this business realistically. Hopefully anyone who has read this far will have gotten the point: this is a profitable business. To say otherwise is to speak in ignorance. Reply
@d5280: Um... You are way out of your area:
The company I work for has 35 employees, ranked just outside the top ten companies in all of NY [state] to work for, over 90% marketshare (nearly a monopoly in our market, specialized software for a particular industry) in our industry, and we earned just under $2M in 08 and 09.
This company is doing $12M.
Also, do the simple math. If each of their employees was earning something well beyond average income - $100K each - that's only $2M in expenses, and if salaries were that high, rent, facilities, and other expenses would be a ding on the radar screen in comparison. let's say expenses were $2.5M... They are still earning a $9.5M in cleared profit. That's ridiculously profitable.
To say ANY of that is "not a lot" is really just ignorance. (of course, this is the internet lol) Reply
The company I work for has 35 employees, ranked just outside the top ten companies in all of NY [state] to work for, over 90% marketshare (nearly a monopoly in our market, specialized software for a particular industry) in our industry, and we earned just under $2M in 08 and 09.
This company is doing $12M.
Also, do the simple math. If each of their employees was earning something well beyond average income - $100K each - that's only $2M in expenses, and if salaries were that high, rent, facilities, and other expenses would be a ding on the radar screen in comparison. let's say expenses were $2.5M... They are still earning a $9.5M in cleared profit. That's ridiculously profitable.
To say ANY of that is "not a lot" is really just ignorance. (of course, this is the internet lol) Reply