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This investment carries considerable risks and may lead to a loss of the entire assets invested. Projected returns cannot be guaranteed and may be lower than expected.

Knicket | Overview



Knicket is the fastest and most comfortable search engine for apps and enables users to find the most relevant apps easier than ever before. As early as 5 months after its launch, Knicket has been used by almost 600,000 users and is already available internationally. Knicket has users from 193 countries and will be available in 11 additional world languages until the end of the year.

EVERYDAY FRUSTRATIONS OF APP SEEKERS

Since there are already more than 2 million apps in the Apple App Store and in the Google Play Store, searching apps is becoming increasingly difficult. Each month, over 40,000 new apps are added. For many subjects, there are already dozens of apps today, and it is almost impossible to identify the best ones. In 2013, 100 billion apps were downloaded; in 2017, this number will likely exceed 250 billions.

 

Number of Downloads from App Stores Worldwide. Source: Statista 2014.

 

Moreover, Apple and Google are creating additional confusion by selecting apps in the app stores based on obscure criteria and on their obvious economic interests. Therefore, it is questionable whether the best search from the users' perspective is even what the major stores want. Indeed, for many subjects, there are free services as well even though fee-based apps are usually pushed.

 

Consumers often end up being confused:

"You have to download 10 apps to find THE right one."

"First, it says that the app is free, but then it isn't."

"Searching for apps is really frustrating."

These are only a few statements from a survey on app search in the app stores.

 

OBSCURE CRITERIA OF GOOGLE AND APPLE

Apps are "big business":

An incredible 100 billion apps were downloaded from the two major stores in 2013, leading to revenues of roughly USD 27bn worldwide. In 2016, global revenues from apps will likely increase to USD 58bn (Source: mobiThinking). In 2013, revenues of EUR 717m were generated by means of apps in Germany alone; in the previous year, revenues came in at EUR 547m (Source: BITKOM, German only).

 

Revenues of the App Stores. Source: Statista, Own Figure

 

It is no surprise that such figures cause companies to focus on economic interests behind the scenes: 

Our co-founder Uwe Flade has developed several apps himself, which have sold several million times and were the "App of the Week" in the Apple App Store in many countries as well. Thus, he also knows the problematic approach of the app stores from a developer's perspective. Uwe Flade: "Even for a successful app company like us, it was impossible to find out which rules Apple and Google follow when emphasizing individual apps. Thus, small companies that do not have sufficient economic power or free apps in particular run the risk of being overlooked even though they may be more interesting to users."

 

THE KNICKET APPROACH

How, then, does Knicket improve the situation of everyone involved?

Here is a concrete example based on the search for a fitness app: 

 

Figure: Apple U.S. iTunes App Store Search Result for "Fitness"

 

The Apple U.S. iTunes App Store provides us with an overview of roughly 2,200 fitness apps, but which app are users meant to choose? iTunes does not provide an answer to this question. The selection cannot be limited any further, and helpful information on the user rating is not available on the overview page. Users are left alone with this rather imprecise result and may only get detailed information through trial and error and overly time-consuming research.

On Knicket, users may limit the list of results in several ways and refine their search. Our database contains all Android and iOS apps on the market. Thus, Knicket enables users to access all apps available in the two major stores. After using our filters, users receive a very small and individual list of apps that they may not have seen in the app stores but that have a high quality nonetheless.

 

Figure: Knicket U.S. Web Search Result for "Fitness"

 

The "tags" (keywords) next to the search box are suggestions for additional filtering: If one clicks "Personal Trainer" in our "Fitness" example, the list of results is already much more precise because it contains only 516 apps. Two more clicks on the keywords "Sports" and "Body Fat" reduce the number of apps to only 15 apps for weight loss.

 

Figure: Knicket U.S. Web Search Result for "Fitness" and Clicked "Personal Trainer," "Sports," and "Body Fat" Tags

 

If one also sets the minimum user rating for the app to 4.5 stars, one gets a small and accurate list containing only 8 apps that perfectly fit our subject. This entire process is absolutely transparent, for we do not exclude a single app. The apps with the most suitable parameters rank highest, independent of their market dominance.

If users want to increase the selection of apps again, they may remove individual filters, or they may use the price slider to further limit the list of apps – for instance by only searching for free apps. In this way, search results can be individualized in real time and are independent of mainstream choices by companies.

 

Figure: Knicket U.S. Web Search Result for "Fitness" with Clicked Tags and Minimum Rating of 4.5

 

THE PERFECT ENVIRONMENT FOR ADVERTISING AND APP PROMOTION

Knicket is highly interesting both to advertisers and to app developers: We are able to display ads that are target group specific and directly related to search requests. The highest prices are paid for advertising with little wastage. This leads to great potential for monetization in the case of Knicket. At the same time, however, the "Knicket promise," which our users love, remains valid:

  • Advertising is always labeled as such
  • Search options are not limited
  • Search results are always completely transparent
  • Advertising addresses interested users in the right environment and is thus considered less annoying

 

KNICKET WORKS!

Knicket works! After 12 months of development and 6 months on the market, we have achieved the proof of concept in regard to all aspects:

  • Even though we have not invested a single cent in advertising or marketing, knicket.com has been used by almost 600,000 users from more than 193 countries so far. This proves that our concept of an independent search engine perfectly fits the time. Moreover, we are only beginning to develop features and added values, and we have a long list of add-ons that we will develop in-house in a resource-efficient fashion, test with some of our users, and only add to our website if the features are really useful.
  • Furthermore, we have already implemented the first types of monetization, which will simply scale up based on the increasing traffic: As many as 12,000 downloads were made in the Apple App Store because of our redirection since the beginning of this year; since May 2014, app developers may display targeted ads, and there are subtle ads on all pages.

 

LOW CUSTOMER ACQUISITION COSTS AND INTERESTING BUSINESS CASE

Since our business can be scaled up to the international level rather easily and since our customer acquisition costs are very low, we are an interesting business case:

Currently, Knicket generates ad revenues and commissions of roughly EUR 2.00 per 1,000 users and has 180,000 users each month. At the same time, our customer acquisition costs today virtually equal EUR 0 per 1,000 users because customers are primarily attracted through PR and organic traffic, i.e., traffic from search engines on our landing pages that we do not pay for. In this area, we have a huge initial advantage because many online services have to deal with customer acquisition costs of EUR 20 per 1,000 users or more. 

Because of the further increase of users, increasing awareness of Knicket, and further optimization of our target group specific way of addressing customers, we will become much more interesting to advertisers and expect revenues of EUR 6.00 per 1,000 users as early as in 2015. In the following years, we want to increase these revenues and the number of users significantly. 

Following a conservative strategy, we will increase our customer acquisition costs to approximately EUR 2.00 per 1,000 users within the same period. Even in this cautious projection, a very attractive contribution margin of roughly 66 % remains.

 

FROM BERLIN TO THE WORLD

Knicket has had an international focus from the beginning: We opted for English as our first language during prototype development last summer, and German will become the second language to be published in June 2014. Simultaneously, we ensured during the development and programming of Knicket that our website may be quickly and easily translated into additional languages – if we launch another language, e.g., Spanish, we only have to pay for two to three weeks of development work, the translation, and the server costs. In total, this amounts to only EUR 8,000 for each language.

Consequently, since we can easily publish Knicket in all world languages, we are able to access a huge market. While people in Europe and the U.S. can hardly imagine life without smartphones today, the importance of apps in markets that have virtually skipped the PC age (e.g., India, China, Malaysia, etc.) is even higher. In these multi-billion markets, the internet traffic of apps is already higher than that of PCs (see also: Mobile Marketer).

 

Please note
The acquisition of this asset involves considerable risks and can lead to the complete loss of the assets used.

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Source: Own research. Based on data from the German Private Equity and Venture Capital Association - BVK, among others.
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