Appster founder Josiah Humphrey laughs out loud when he’s reminded his company has been hailed as the ‘next Apple’. His laughter is a mixture of embarrassment – at the fact Apple’s annual revenue is somewhere near US$200 billion (“We’re a little off that,” he says) – and his desire for Appster to claim its own identity.
“To me, we are the first Appster,” he says.
Still, the company, created by Humphrey with childhood friend Mark McDonald, is already an amazing international business success story even if its founders are wary of high-flying comparisons.
Humphrey describes Appster as an ‘accelerated execution partner’. In other words, it makes ideas happen – specifically ideas for technology-based startup companies. If technology is a goldmine, Appster is supplying the picks and shovels to dig for riches, becoming a very successful innovation company at the same time.
“If you have an idea for a mobile app or a web app or you want to create the next Uber, we are the perfect partner,” Humphrey explains.
For startups, the financial and logistical challenges in launching a product can be prohibitive. There’s great financial risk in hiring an engineering team, office space and other associated costs. Humphrey has seen these bills rise to over US$3 million a year for some startups.
Appster’s in house team can help drive down expenses that make an otherwise good idea unviable – rather than spending millions, an average project cost could be reduced to US$250,000. It’s a business idea in big demand that has proven incredibly successful in a short time.
A teenage entrepreneurs’ fantasy
The Appster story is not a typical tale of a ‘startup made good’. It is almost a fantasy story. Humphrey and McDonald met online as teenage entrepreneurs, now aged 25 and 24 respectively. They were recently listed in several ‘richest 40 under 40’ lists. Humphrey sold digital products aged 13, ran a lead-generation business at 15 and also briefly traded options. A straight-A student at high school, he dropped out of school after convincing his parents that the entrepreneurial career he was destined for required real-world experience.
“I had the support of my parents,” Humphrey laughs. “When I say ‘support’ I mean I probably wasn’t going to take no for an answer.”
Humphrey and McDonald travelled from Melbourne to Sydney to hear celebrity entrepreneur Tony Robbins speak at an event. They left inspired and plotted their own business strategy from a table in a fastfood restaurant. Their plan: rent an office in a Melbourne skyscraper next to Google and IBM, then figure out what to do.
Humphrey understands how ridiculous his story may sound. “We had so much expense – 80 per cent of our money was going into rent,” he says. “A few months later we started an education company – ironic considering I dropped out of school – and founded Appster in late 2011.”
‘Bootstrapping’ for startup success
Humphrey and McDonald are now co-founders and co-chief executives of a multinational company that is growing at an incredible rate. The Australian Financial Review estimates their combined personal net worth at A$58 million. A reason for this, Humphrey claims, is they have no outside investors – the pair own 100 percent of the company, which is unusual for startup companies.
In the US, it’s common for venture capital or angel investors to financially support startups. In Australia, startups’ success is often built around the concept of ‘bootstrapping’ – building your business with your own money and revenue.
“When you’re bootstrapping and don’t have $10 million in the bank, you live and die by every dollar,” says Humphrey. “We were smart with how we controlled our cash. Not every business model can be bootstrapped but we had a model that allowed it.”
How Appster helps its customers
One of Humphrey’s favourite Appster customers is Bluedot Innovation, founded by Melbourne-based duo Filip Eldic and Emil Davityan. Bluedot’s clients use its technology to create apps that can trigger virtually any action from your mobile device – from opening a website, playing audio and video, charging a payment – even augmenting reality.
Touted as the ‘Next Big Thing’ by many tech insiders, Bluedot’s initial idea had been to devise a mobile phone payment platform for toll-roads. Appster built a prototype product for Bluedot and helped fine-tune and showcase the technology to attract wider interest and investment.
“This is a win-win for us,” says Humphrey. “Our ultimate goal is to see startups succeed. The failure rate for any startup is extremely high. Appster aims to minimise risk, make it cheaper to get started and provide the right kind of consulting.”
Now headquartered in San Francisco, Appster plans to expand its workforce across its Australian, Indian, and American operations while retaining the company’s original culture and standards.
“San Francisco is the ideas hub of the world – there is no place like it,” says Humphrey.
The company also plans to make its services available to an even larger customer base so more people can see their own tech-based ideas come to fruition.
“Demand is currently outstripping supply,” says Humphrey. “Launching a tech startup is still not a cheap thing to do – it can run into six to seven figures. We’re looking into ways to provide more economies of scale for entrepreneurs. We have some interesting ideas in the pipeline.”