buUuk, a popular mobile restaurant application, shot to fame when they were one of the first few apps in Singapore to include Augmented Reality feature. In a span of 10 months, they have managed to acquire 160,000 users from 26 countries and 80 cities with their iPhone application, averaging a remarkable 8 minutes of usage time each time a user accesses it. But what’s a lesser known fact is that buUuk’s primary focus is not on their product – they are a mobile application development house specializing in location based apps for iPhone, Android and recently the RIM platform. In conversation with buUuk founders Jon and Mohan, I got to know their varied thoughts on mobile application space and about balancing product development with consulting and monetizing from mobile apps.

Balancing product development with consulting

Jon reasons that because they are in the mobile application space, they can’t base their business on a single product alone as there is no sustainable revenue model to be made – at least for now.  “Just like popstars, you are as good as your last hit” and in order to create a self sustaining business, they focus on creating premium applications for clients where there is a huge opportunity to learn something new. This in turn, forces them to stay ahead of the curve. “We don’t believe in taking up projects to create low end consumer applications, because they are boring [to developers],” he says.

“We don’t really sit down and strategize on our long term vision for the company. We want best of both worlds – we want to have fun and get paid. By developing applications for other companies, we are getting paid to learn and you become a better company only by learning and staying updated with latest happenings.”

They recently built New Paper’s world cup app for the iPhone, which received about 70,000 downloads and  has sent about 530,000 push notifications so far. buUuk’s next step is in the direction of building applications for the iPad.

Mobile marketing

“We are mainly a technology company and not a sales company. We do not want to put our resources into marketing as mobile marketing is mainly about getting the early adopters.” Asked about what kind of marketing strategies they applied to get 6-figure downloads for the buUuk app, Jon says it’s mainly through word of mouth and some press. “We don’t make press releases, media organizations approach us and write about us. If we get a mention on The Straits Times, we get about 4000 downloads that day.”  Of course, it does help that buUuk has a working relationship with SPH after creating their recent Straits Times iPhone app.

buUuk’s main user base is Singapore followed by Malaysia and then Indonesia. “We feel like a big fish in a small pond. The good thing about Asia is that, there is hardly any competition, but the bad thing is that there are not many potential users.” He gives the example of Brunei, where they have almost 100% penetration but when it comes to absolute numbers, it’s very low.

Things are changing however, with services like Foursquare coming into Asia, it drives awareness of location-based apps and the concept of using devices on the move. They have observed an increasing number of downloads after people became more aware of the check-in feature that buUuk has had since the very beginning, something people were unaware of previously.

Competition

Their direct competitor in this space is HungryGoWhere, arguably the most popular food guide in Singapore. Jon however, sees it differently. HungryGoWhere’s main product is the web-site with mobile application being secondary, whereas buUuk only focuses on mobile users. “They’re in a different situation and their primary business model is around their web site. But they need to be careful on how to balance their existing business model with mobile application, without cannibalizing their cash from web ads”. buUuk recognizes that currently, mobile applications cannot be easily monetized, but that won’t be the case in next 5 years, he adds.

Monetization

buUuk’s revenue model is mainly through partnerships and advertising. They have existing partnerships with AMX and Maybank to display their dining offers on buUuk. They also charge restaurants daily fees to display their offers on the application. But as they say, this amount of money is not enough for them to pay their team of five.

They were initially funded by iJam scheme from MDA, but with application development space heating up, project offers have been consistent and more importantly, they mention that they are receiving interesting offers from companies to fund them, though they’re not sure if they want to take it up as yet.