Silicon Valley entrepreneur Jahanzeb Sherwani designed an application to control his computer from his iPhone while working as a doctoral student in Pakistan. The business potential in that personal endeavor seeded a start-up, iTeleport. The Mountain View, Calif.-based firm creates programs for use on the iPhone, the iPad and the iPod Touch. Sherwani shares his assessment of the opportunities and challenges ahead for mobile applications development with India Knowledge at Wharton.
An edited version of the conversation appears below.
India Knowledge at Wharton: What trends do you see in the environment today for mobile applications development? There is a growing chorus of people who are iPhone and iPad fans, and those who are bucking that trend and going to Android. Do you think of those as two separate markets, or do you think one will win out over the other?
Jahanzeb Sherwani: There are many sides to that question. The one that I am most interested in is as a developer and as a user, what do you like to use? If you are an iPhone user, and you love the iPhone, you are likely to just develop on it because that’s your life. That’s a very developer-centric way of thinking. But a lot of times, you find independent developers doing exactly this because it’s a very personal thing.
If you’re going to [start] a business that’s Android-focused, or iPhone-focused or both, you have a whole different set of constraints. But [in] the world where I come from, and the people that I know, it’s all about which device you use.
India Knowledge at Wharton: What type of growth potential do you see in the different platforms?
Sherwani: There are all sorts of numbers being thrown around. At one point, Android activations per day were more than iPhone activations. Then the iPhone 4 launched, and I think the numbers changed. But it’s not just about activations. There are a whole bunch of other aspects you need to think about in this context. For instance, the other metric that I have thought a lot about is that the average app spend on an Android is far less than that on an iPhone. I’ve also heard that the user experience on the Android makes it feel more like a device that things should be free on, whereas on the iPhone it’s more like a premium product that looks shiny and you are happy to spend money on. There is another technical problem, which is that I think the Android store only lets you buy apps in 13 countries, whereas the iPhone ecosystem lets you buy apps in 90 countries.
India Knowledge at Wharton: What about the global reach? The iPhone is certainly pushed aggressively in the U.S. and in Europe and in developed markets. Is Android playing catch up in those markets? What about the developing markets?
Sherwani: The question of reach is a difficult one. I come from Pakistan and [it has] a thriving iPhone user base there even though the iPhone was never officially launched there. You can actually buy iPhone and iPad apps in Pakistan even though the iPhone isn’t officially supported there. If Android’s strategy is that they need to be filling in these holes, they need to let people buy apps. The other danger there is that people are getting used to the fact that apps should be free. As a developer you don’t want to have that happen to your user base because then the business model just dies.
India Knowledge at Wharton: Let’s insert iPad into the mix. Before it launched, there was a lot of discussion about all the apps, especially on the publishing side and the display side, and developers were excited about what they could monetize because they expected a different demographic to buy the programs. Are you seeing that? Is it a separate category from the iPhone, or is it trending more towards iPhone’s statistics?
Sherwani: Well, there are definitely different users, as well as applications, on the iPad. They are very different than [those on] the iPhone. One of my favorite apps on the iPad — not as a user but just as an admirer — is Flipboard, which is a different view of your Facebook news feed. What’s exciting about this is that people, who might have an iPhone or those who might not, are finding very different uses for their iPad. It’s not a mobile device. You don’t put it in your pocket. But you can take it on a train and read stuff on it even at home. We see a lot of excitement for our customers; they want to have a bigger device, a bigger display, to see their remote desktop. So there are definitely a different bunch of users as well as different applications that have opened up.
India Knowledge at Wharton: Do you think that we will see app development for the iPad trending up?
Sherwani: Even though there are 200,000 iPhone apps out there, we haven’t really seen the best of what’s to come. There is always room for improvement. The best people haven’t really joined the bandwagon yet. There are a lot of throwaway apps that you use for a couple of days and then you’re done with them. But Flipboard is a really good example of a team of people that have come together to make something of high quality and, unfortunately, that’s just way more rare than we believe it should be.
India Knowledge at Wharton: Let’s move on and talk about your company iTeleport. Your app basically enables users to access their remote desktops on the iPhone or iPad screen. What was the genesis of the idea of iTeleport?
Sherwani: It’s for the iPhone, iPad and iPod Touch. The original idea came in 2008 before there was an app store. I was in Pakistan doing my Ph.D. thesis research; I had a computer connected to my TV, and I would watch TV shows on it. It was always a pain to have a wireless keyboard mouse to control the computer remotely. I wanted a way to do it on the iPhone. That’s the first itch I decided to scratch and make that the first app.
India Knowledge at Wharton: So you almost created a remote control.
Sherwani: Yes. In fact, it was a wireless touchpad. Just like the touchpad on your laptop — imagine just ripping that out and putting it on an iPhone and then having it wherever you are. You could control the mouse like a touchpad and you could also press a button and a virtual keyboard would come up. So that’s where the idea came from. I had spoken with a bunch of people about it and everyone said, “Yeah, that’s an interesting idea.” But an idea is only an idea until you do something about it.
India Knowledge at Wharton: From the moment you had the idea, how long did it take you to build it?
Sherwani: It took me a week or so to figure out how to make an app for the iPhone, given that there was no official documentation on that at the time. The only resources were hackers around the world who had figured out how to make this stuff work. Some of them had put up some documentation, so I went to that. I’d never coded an iPhone or a Mac app before, and Objective-C, the language you need to program in, was new, so I had to figure that out.
India Knowledge at Wharton: How long did it take you to realize that you actually had a business idea?
Sherwani: How long did it take me to figure out that this was even an idea of any importance at all? That took me just a couple of days because all the big tech blogs — Gizmodo and Gadget and Digg, which is a social news aggregator site — had a mention of my app on their front page. And so, within three days, there were 100,000 hits to the YouTube video I had made. People from all over the world were using the app, asking for features and bug fixes and so on. So what for me was a little hobby that I just did and wanted to move on with my life and complete my Ph.D. and whatever — suddenly became this thing that started pulling at me.
But there was no business model. I wasn’t charging for anything. It was open source and I just didn’t have any idea that open source could make money. But a couple of months later, I made a feature that I started charging for. The first day of sales I made US$5,000 in revenue. And this was at a time when I was a graduate student earning US$2,000 a month. I just decided on an arbitrary number of US$15-€15. All the payments had to be done manually, so I was using PayPal and a whole bunch of other stuff. But that was the day that I realized that this had business significance.
I started entertaining the idea of doing this in a bigger way for the first time. I knew that if I wanted to bring it to the app store, I would have to do a lot of work. And I wasn’t sure if I was willing to put in all of the work that was required to do that. The question I had to ask myself was, “Are you willing to do this from scratch for the app store? And is there going to be enough of a payoff?” At this point, it looked like there definitely was going to be a payoff so it was worth it.
India Knowledge at Wharton: Did you decide to self-fund your venture, or did you go out and talk to investors?
Sherwani: Talking to investors was nowhere on the radar for me. Luckily, I had already earned some revenue … and the costs involved were insignificant. It was just about whether I wanted to devote my own time to it. So investment was never really an issue.
India Knowledge at Wharton: Now you sell the app for US$24.99 and it’s a top-grossing app in your category. How did you price it?
Sherwani: I thought it should be US$30 — it’s a premium app. My wife said, “That seems like a bit much. Maybe it should be US$20.” I said, “Okay, fine US$25.” And that’s how it happened. We’ve launched the first app on the [iTunes] app store that allows users to try it for 30 days for free before they have to buy. The app is simply called iTeleport and it’s a free download.
India Knowledge at Wharton: Are there other apps on the Apple app store that do this? If so, how does iTeleport differentiate itself?
Sherwani: There are actually some apps that do stuff similar to what we do. There is one app from a company called LogMeIn, and they price it at US$30. There is this whole range from free to more expensive than ours. We’ve been awarded a patent by the U.S. Patent and Trademark Office on our primary interaction interface, which makes it far easier to control a remote desktop using a capacitive touch screen device, and we’re working on other innovations beyond this.
India Knowledge at Wharton: Have you entertained ideas about opening different distribution channels?
Sherwani: For the iPhone and iPad, there is only one distribution channel, which is the app store. If and when we move to Android and other platforms, we will be looking at what distribution channels work there. But we are considering the web as a separate parallel channel where we could have an app that you could use not only on a desktop — like a Mac or a Windows computer — but maybe even on a mobile browser. And then there’s the Mac app store.
India Knowledge at Wharton: How come you haven’t developed an iTeleport app for Android yet?
Sherwani: It’s a matter of choosing your battles. As a small start-up, we realize that we need to focus our energies on one platform and not dilute ourselves trying to do too many things at the same time.
India Knowledge at Wharton: Do you have an interesting user story that sticks with you?
Sherwani: One that is the most touching is of this person who wrote in out of the blue and said he had been in an accident two years ago, had been paralyzed for a while and that he is in pain unless he is lying down horizontally. He wanted to return to his studies, which were on his computer, and he couldn’t actually access the computer because it was physically impossible. He tried speech recognition and other things, but nothing really worked. And then he found our app and said that it’s been transformative for his life and that he’s been able to use a computer to get back to his studies in a way that he never thought was possible. That really touched us — and in the future, we want to work with people like him to design our app for those kinds of scenarios. Right now, the app worked for him almost by accident — and it’s likely that the user experience could be improved significantly if we were to design for that scenario. There might not be any money in doing this, but many of the things we do at iTeleport are not for money, but because we just feel it’s worth doing.