The Sparrow Problem →
David Barnard:
And yet [Sparrow] was a financial flop.
Flop? Yes. There have been whispers and conjecture to that effect over the past few days, but no one has been able to prove it. I can.
There’s also some evidence that suggests that Sparrow was making $70,000–90,000 per month. Those are great numbers, but with a staff of five people in the cut-throat market for engineering talent, it goes quickly — a good developer may cost $15,000 per month to employ after all of the benefits and overhead.
Those income numbers were probably also for the good months. As any App Store developer knows, its income is like a roller coaster: you never know what you’re going to make next month. It could be 25% or 400% of last month. So when you have the high fixed monthly costs of a full-time staff, you need very high profits in the good months to keep you in business through the bad months. It sounds like Sparrow just didn’t have enough breathing room.