Five years ago, Keith Shields and Joshua Tucker ditched their plans to become engineers to create mobile apps for struggling startups. Today, their software development company is transforming the digital presence of Fortune 500 companies.
In 2012, Shields and Tucker, owners of software development company Designli, were more than 300 miles away from each other when they heard the big news coming out of Silicon Valley: Facebook’s Mark Zuckerberg, in a surprising move, had purchased the photo- and video-sharing app Instagram.
The two, then-sophomore mechanical engineering students at Ohio State University and Alfred University, respectively, couldn’t believe it. Facebook — a company that was about to become one of the largest initial public offerings in history — shelled out $1 billion for a two-year-old app that had 13 employees and zero revenue.
It was a sign for Shields and Tucker, who were coders and former high school classmates.
Soon after, they got in touch and began formulating their plan to enter the world of mobile app development. “The Instagram sale was the ‘a-ha’ moment for us. We knew that apps were the next big thing,” Tucker said.
“We didn’t have the knowledge to create apps from scratch, or the budget to hire developers. We were greedy college kids,” Shields said. “But we had some idea of what we wanted, and that was enough for us.”
Shields and Tucker, who had some knowledge of programming languages like HTML, created a website that solicited new app concepts and invited users to vote each month on the idea that they found most promising. They wrote a business plan, raised about $70,000 among friends and family, and named the competition Applits.
“We actually used our seed rounds to pay freelance developers,” said Tucker, who transferred to Ohio State in fall 2012 to help get the business off the ground.
Six months after the selection of the site’s first winner, the duo had recruited developers in Romania, designers in Paraguay, and an entire team from India. Meanwhile, a group of U.S. project managers kept things running smoothly.
From engineers to startup saviors
Shortly after, Tucker dropped out of college to focus on Applits and returned to his parents’ house in Marcellus, N.Y.
As the site became better known in the industry, Tucker and Shields started to notice that more and more users were asking them if they could create their apps outside the confines of the monthly competition.
“Some of our users owned businesses or startups, and they had the budget for their app’s development,” said Shields. “We noticed a demand for software developers that could create high-quality, affordable apps and websites in a short timeframe. Luckily, we had a solution.”
In 2013, Shields and Tucker launched Designli, a software development company that creates mobile apps and website designs for startups. In 2014, as the agency started to garner more and more clients, Tucker moved to Greenville. Shields followed in 2015.
The duo purchased a house in downtown and hired several project managers.
Soon after, they decided to close Applits. After three years, the company had received more than 2,000 app ideas, created 18 mobile apps for the iTunes and Google stores, and received Inc.’s 2014 Coolest College Startups award.
One of its most profitable products was ReadyMic, which transformed a Bluetooth headset into a wireless microphone for videos shot using an iPhone. FaceCap, another popular app, allowed users to make custom emojis of their own faces. The apps once garnered several hundred downloads a day, according to Shields.
However, the company only made about $1,800 from the apps. “It wasn’t a winning business model, but it actually taught us a lot about apps,” said Tucker. “Our free mobile apps had around 500,000 downloads. The iTunes and Google stores are just massive, so we weren’t making much money on the paid ones.”
In 2015, Shields and Tucker moved their headquarters to OpenWorks in downtown Greenville, where they started to garner new clients. “Greenville’s startup ecosystem is really young, so it’s nice to be on the forefront of that,” said Shields.
Using their vetted network of about 60 developers, Shields and Tucker started offering their new clients a unique solution: a fixed-fee pricing model and transparency throughout the entire app development process.
“Our project managers work closely with clients in the early stages of the process to identify problems they want solved,” Shields said. “We then design and develop an application that will tackle the problem, and we make client relations a priority.”
“We’re also able to hit the price point that is required for entrepreneurs to get their app off the ground without compromising quality. If a project goes over budget, we don’t pass the costs off to our clients,” he added.
According to Shields, it costs at least $5,000 for project managers to consult with clients and design a mobile application or website. That process allows them to frame the user experience and design the user interface.
Clients can then preview their new mobile application or website. Screens are linked together through an interactive prototype that allows clients to show their stakeholders or investors the solution. “There’s no coding done in this stage, but it proves that the solution is worth building,” Shields said.
It typically costs between $40,000 and $150,000 for Designli to fully develop an app or site, according to Shields. Since 2013, the company has completed more than 100 software projects for various industries.
For instance, Designli has created an app for Greenville’s Accessible Diagnostics that can read diabetic testing strips. In 2014, Clemson University student Kayla Wilson developed an ultra-low-cost test process called Glucosense, in which an inkjet printer dispenses enzymes onto inexpensive filter paper. When exposed to blood, the strips correspond to glucose levels, and turn various shades of blue.
The company, which plans to eventually submit its materials for FDA approval, hopes to distribute the strips to medical clinics throughout India, Africa, and Latin America.
Designli’s contribution was to create an app that would more accurately interpret the shades of blue on the strip. The mobile app snaps a picture of the strip, analyzes the color, and produces a blood glucose reading. Essentially, the phone becomes a glucometer.
“People living in rural India cannot afford typical diabetes strips, so they don’t test themselves,” Shields said. “But it just so happens that they do have Android smartphones. So by baking the technology into the phone instead of the strip itself, the cost of those strips go way down, and now the extremely poor can afford to track their blood glucose.”
Designli also develops apps and sites for emerging startups across the country.
Louisville, Ky., startup Arrow Food Couriers, a restaurant food delivery service that partners with restaurants that don’t offer delivery service, hired Designli two years ago to create an iPhone app called ArrowMyFood and an accompanying website.
The app allows customers to place their food orders and track them in real time. Customers whose information has already been saved can place an order within 30 seconds. It also allows drivers to update the status of an order.
Trouble with the technology curve
The future seems grim for software companies that rely solely on app development.
Many technology startups rely on mobile apps, which have skyrocketed in popularity and utility since Apple introduced the iPhone App Store in July 2008. In fact, mobile apps now represent 52 percent of time spent with digital media in the U.S., according to comScore, up from 40 percent in early 2013.
Yet most U.S. smartphone owners download zero apps in a typical month, according to comScore’s new mobile app report. While smartphone apps are sucking up more of our time than ever, people only use a few of them.
Only about a third of smartphone owners download mobile apps in an average month, with the bulk of those downloading one to three apps. The top 7 percent of smartphone owners account for “nearly half of all download activity in a given month,” comScore reports. Last year, the top 15 app publishers saw downloads drop an average of 20 percent in the U.S., according to Nomura.
According to European analytics firm Adjust, more than 80 percent of the 1.4 million apps in Apple’s App Store can’t be found on any of the company’s thousands of top category rankings. As a result, many languish in obscurity.
Also, startups are decreasing across the U.S. The startup rate has fallen over the past 30 or so years, from 14 percent of total companies in a given year to about 8 percent, according to researchers Ryan Decker of the Federal Reserve Board, John Haltiwanger of the University of Maryland, and Ron S. Jarmin and Javier Miranda of the U.S. Census Bureau.
Shields and Tucker said startups now only account for 50 percent of their clients.
However, the changing market has actually created new opportunities for Designli, which has recently started providing services for enterprises, which range from regional businesses to Fortune 500 companies such as Michelin.
Many enterprises, especially manufacturing companies, are on the lagging end of the technology adoption curve, according to Shields. “They’re lacking iPhone apps, mobile responsive websites, and more. These are not new pieces of technology,” Shields said.
“We’re basically pushing these companies to the forefront of the curve by helping them adopt existing, proven technologies,” he added. “Many businesses don’t understand why they need apps. But it doesn’t need to be an app. It can be a collapsible and expandable website that looks great at every resolution. It’s figuring out the best application of technology for that business.”
Many enterprises across the country are requesting iOS apps to improve customer experiences and business-to-business transactions.
For instance, Mullican Flooring, which manufactures hardwood floors, recently hired Shields and Tucker to create an iOS app that can easily showcase the company’s 2,000 products during demos.
“They don’t want to have to flip through the pages of a catalogue for demos. They want a digital catalogue where you can swipe through each of the products, and sort them and filter them and see the benefits right there,” Shields said. “They just needed assistance understanding how to apply the technology to their business to be more customer-friendly and enhance the digital experience.”
Also, Designli is developing an iOS app for Henderson Oil Company, which distributes gasoline to stations across the Southeast. The mobile app will allow gas station customers to place orders on the move without having to call for prices or to place orders. That should expand the capacity of the employees at the company, who can now process orders more efficiently.
While Shields and Tucker are receiving more requests from enterprises, they plan to maintain their services for startups. “Our vision is to keep working with startups, because they keep you in front of the technology curve,” Shields said.
“Our two markets complement one another. The startups keep us engaged with the up-and-coming ideas. Once those technologies get proven and adopted in the mass market, we’re in a good position to go to the enterprise and push them forward on the technology-adoption curve,” Tucker said.